New employees rely on the payroll accounting professional to help them understand their paycheck. Quite often candidates are wooed into new positions with starting salaries that seem impressive but the amount looks much smaller when divided by pay periods with taxes, insurance and retirement removed from the amount. Hope Kingsley is a somewhat new employee at Some Corporation, where she began working January 1, 2019. She has just received her 8th paycheck of the year and have noticed a few issues she would like some help with. Your job is to find those mistakes, explain what the mistake actually is (i.e. tax is calculated wrong, dates are wrong, etc.), and fix it (i.e. calculate the correct amount of tax; include the correct date, etc.) There are a total of 10 mistakes on this paystub. Each mistake that you identify, explain, and fix, is worth 5 points, for a total possible of 50 points. Please assume that all names and addresses are correct, the Married status and the allowances for both Federal and State are correct, the fact that she worked 80 hours in the 2-week pay period is correct, and her Gross Pay for this pay period is correct. The amounts deducted for Health, Dental, and Retirement are also correct. The Health and Dental deductions are not exempt from any taxes and, therefore, should not be subtracted from the income. Some Corporation pays it employees bi-weekly, with the pay period beginning on Sunday and ending the following Saturday. The company uses the Percentage Method to calculate ALL Federal Income Tax. The paychecks are distributed the Friday following the end of the pay period. ALL employees of the company are paid on an hourly basis. Below is the 8th paycheck of 2019 for Hope Kingsley, a brand new, hourly employee. Please note that the weekly amounts and the year-to-date amounts should be considered SEPARATE mistakes, not one big mistake. Please review the check stub below and identify, explain (provide calculations when necessary), and fix the 3 remaining mistakes: 1. The payment date being bi weekly will be 22. April 2018 not 27th. 2. Social security tax is calculated at the rate of 6.2%, the amount will be $74.40, likewise the year to date will be $595.20 3. Medicare tax is calculated @ 1.45% amounting to $17.40. likewise the year to date will be $139.30 4. No. Of Federal tax deduction is 2 (Health and Retirement.) 5. State income tax for married filers is 4.25%, hence the amount will be $51. Likewise the to date collection should have been $408 6. Hourly rate is incorrect. Should be stated as earnings per hour, not total earnings for the pay period. $1,200 gross pay / 80 hours worked = $15 correct hourly rate 7. The retirement states that it is excluded from Federal and State tax, so these amounts be calculated from $1050 and NOT $1200 Earnings Statement Some Corporation 123 Somewhere Drive Ann Arbor, MI 48104 Hope Marie Kingsley 8670 Rogerson Drive Ann Arbor, MI 48104 98856 Administrative Assistant 123-45-6789 K7890 4/7/2019 - 4/20/2019 4/26/2019 Married Employee ID Number Job Title Social Security Number Department Number Pay Period Pay Date Taxable Marital Status Exemptions/Allowances Federal State Earnings Rate Hours 1,200.00 80 Gross Pay Deductions Federal Income Tax State Income Tax Social Security Tax Medicare Tax This Period 1,200.00 1,200.00 Year To Date 9,600.00 9,600.00 121.99 79.68 18.64 65.63 975.92 637.44 149.12 525.04 Health Dental Retirement Net Pay 76.58 26.56 150.00 660.92 612.64 212.48 1,200.00 5,287.36 "Excluded from federal and state income taxes only. Not excluded from FICA taxes. New employees rely on the payroll accounting professional to help them understand their paycheck. Quite often candidates are wooed into new positions with starting salaries that seem impressive but the amount looks much smaller when divided by pay periods with taxes, insurance and retirement removed from the amount. Hope Kingsley is a somewhat new employee at Some Corporation, where she began working January 1, 2019. She has just received her 8th paycheck of the year and have noticed a few issues she would like some help with. Your job is to find those mistakes, explain what the mistake actually is (i.e. tax is calculated wrong, dates are wrong, etc.), and fix it (i.e. calculate the correct amount of tax; include the correct date, etc.) There are a total of 10 mistakes on this paystub. Each mistake that you identify, explain, and fix, is worth 5 points, for a total possible of 50 points. Please assume that all names and addresses are correct, the Married status and the allowances for both Federal and State are correct, the fact that she worked 80 hours in the 2-week pay period is correct, and her Gross Pay for this pay period is correct. The amounts deducted for Health, Dental, and Retirement are also correct. The Health and Dental deductions are not exempt from any taxes and, therefore, should not be subtracted from the income. Some Corporation pays it employees bi-weekly, with the pay period beginning on Sunday and ending the following Saturday. The company uses the Percentage Method to calculate ALL Federal Income Tax. The paychecks are distributed the Friday following the end of the pay period. ALL employees of the company are paid on an hourly basis. Below is the 8th paycheck of 2019 for Hope Kingsley, a brand new, hourly employee. Please note that the weekly amounts and the year-to-date amounts should be considered SEPARATE mistakes, not one big mistake. Please review the check stub below and identify, explain (provide calculations when necessary), and fix the 3 remaining mistakes: 1. The payment date being bi weekly will be 22. April 2018 not 27th. 2. Social security tax is calculated at the rate of 6.2%, the amount will be $74.40, likewise the year to date will be $595.20 3. Medicare tax is calculated @ 1.45% amounting to $17.40. likewise the year to date will be $139.30 4. No. Of Federal tax deduction is 2 (Health and Retirement.) 5. State income tax for married filers is 4.25%, hence the amount will be $51. Likewise the to date collection should have been $408 6. Hourly rate is incorrect. Should be stated as earnings per hour, not total earnings for the pay period. $1,200 gross pay / 80 hours worked = $15 correct hourly rate 7. The retirement states that it is excluded from Federal and State tax, so these amounts be calculated from $1050 and NOT $1200 Earnings Statement Some Corporation 123 Somewhere Drive Ann Arbor, MI 48104 Hope Marie Kingsley 8670 Rogerson Drive Ann Arbor, MI 48104 98856 Administrative Assistant 123-45-6789 K7890 4/7/2019 - 4/20/2019 4/26/2019 Married Employee ID Number Job Title Social Security Number Department Number Pay Period Pay Date Taxable Marital Status Exemptions/Allowances Federal State Earnings Rate Hours 1,200.00 80 Gross Pay Deductions Federal Income Tax State Income Tax Social Security Tax Medicare Tax This Period 1,200.00 1,200.00 Year To Date 9,600.00 9,600.00 121.99 79.68 18.64 65.63 975.92 637.44 149.12 525.04 Health Dental Retirement Net Pay 76.58 26.56 150.00 660.92 612.64 212.48 1,200.00 5,287.36 "Excluded from federal and state income taxes only. Not excluded from FICA taxes