Exercise 9-10A Calculating payroll LO 9-5 Old Town Entertainment has two employees in Year 1. Clay earns $4700 per month and Philip, the manager, earns $10,700 per month Neither is paid extra for working overtime Assume the Social Security tax rate is 6 percent on the first $110,000 of earnings and the Medicare tax rate is 15 percent on all earnings. The federal income tax withholding is 14 percent of gross eamings for Clay and 18 percent for Philip. Both Clay and Philip have been employed all year. Required a. Calculate the net pay for both Clay and Philip for March b. Calculate the net pay for both Clay and Philip for December c. Is the net pay the same in March and December for both employees? d. What amounts will Old Town report on the Year 1 W-2s for each employee? Answer is not complete. Complete this question by entering your answers in the tabs below. Reg A and B Req Reg D Calculate the net pay for both clay and Philip for March. Calculate the not pay for both Clay and Philip for December (Do not round intermediate calculations and round your answers to 2 decimal places.) Clay Philip Clay Philip Net Pay S 3,595,50 $ 7.22150 $ 3595 50 s 4.827.50 b ReqC > Reg A and B Req c Reg D What amounts will Old Town report on the Year 1 W-2s for each employee? (Do no Amount Appearing on W-2 for Year 1 Clay Box 1 Box 2 Box 3 Wages, tips, and other compensation Federal income tax withheld Social security wages Social security tax withheld Medicare wages and tips Medicare tax withheld 56,400 9,024 X 56,400 3,384 56,400 846 Box 4 Box 5 Box 6 Philip Box 1 121 200 X 25,452 X Box 2 Box 3 Box 4 Wages, tips, and other compensation Federal income tax withheld Social security wages Social security tax withheld Medicare wages and tips Medicare tax withheld 6,600 121,200 Box 5 Box 6 1.818 X