Sky Company employed Tom Mills in Year 1. Tom earned $5,900 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 1.5 percent. Toms federal income tax withholding amount is $870 per month. Use 5.4 percent for the state unemployment tax rate and 0.6 percent for the federal unemployment tax rate on the first $7,000 of earnings per employee. Required

1. Answer the following questions.
   1. (1) What is Toms net pay per month?
   2. (2) What amount does Tom pay monthly in FICA payroll taxes?
   3. (3) What is the total payroll tax expense for Sky Company for January Year 1? February Year 1? March Year 1? December Year 1?
2. Assume that instead of $5,900 per month Tom earned $9,600 per month. Answer the following questions.
   1. (1) What is Toms net pay per month?
   2. (2) What amount does Tom pay monthly in FICA payroll taxes?
   3. (3) What is the total payroll tax expense for Sky Company for January Year 1? February Year 1? March Year 1? December Year 1?

\begin{tabular}{|l|l|} \hline & \begin{tabular}{c} Total Employer \\ Payroll Tax \end{tabular} \\ \hline January & \\ \hline February & \\ \hline March & \\ \hline December & \\ \hline \end{tabular} \begin{tabular}{l|l} \hline & Net Pay \\ \hline January to November (per month) & \\ \hline December & \end{tabular} \begin{tabular}{l|c} FICA \\ Payroll Tax \end{tabular} \begin{tabular}{|l|l} \hline January & \begin{tabular}{c} Total Employer \\ Payroll Tax \end{tabular} \\ \hline February & \\ \hline March & \\ \hline December & \\ \hline \end{tabular}