RequiredSky Company employed Tom Mills in Year $1.$ Tom earned $$5,800$ per month and worked the entire year. Assume the Social Security tax

rate is $6$ percent for the first $$110,000$ of earnings, and the Medicare tax rate is $1\mathrm{.}5$ percent. Tom's federal income tax withholding

amount is $$900$ per month. Use $5\mathrm{.}4$ percent for the state unemployment tax rate and $0\mathrm{.}6$ percent for the federal unemployment tax

rate on the first $$7,000$ of earnings per employee.

Required

a$.$ Answer the following questions.

$(1)$ What is Tom's net pay per month?

$(2)$ What amount does Tom pay monthly in FICA payroll taxes?

$(3)$ What is the total payroll tax expense for Sky Company for January Year $1?$ February Year $1?$ March Year $1?$ December Year $1?$

b$.$ Assume that instead of $$5,800$ per month Tom earned $$9,700$ per month. Answer the following questions.

$(1)$ What is Tom's net pay per month?

$(2)$ What amount does Tom pay monthly in FICA payroll taxes?

$(3)$ What is the total payroll tax expense for Sky Company for January Year $1?$ February Year $1?$ March Year $1?$ December Year $1?$

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Req A$1$

Assume that instead of $$5,800$ per month Tom earned $$9,700$ per month. What is Tom's net pay? $($Round your answers to $2$

decimal places.$)$

Use the following information to prepare a multistep income statement and a classified balance sheet for Eller Equipment Company for

Year $2.($Hint: Some of the items will not appear on either statement, and ending retained earnings must be calculated.$)$

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Income

Statement

Balance Sheet

Prepare a multistep income statement for Eller Equipment Company for Year $2.($Amounts to be deducted should be indicated

with a minus sign.$)$

ELLER EQUIPMENT COMPANY

Income Statement

For the Year Ending December $31,$ Year $2$