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Financial & Managerial Accounting 3rd Edition by Charles Horngren,Harrison, Walter,Suzanne Oliver
Edition 3ISBN: 978-0132962339Financial & Managerial Accounting 3rd Edition by Charles Horngren,Harrison, Walter,Suzanne Oliver
Edition 3ISBN: 978-0132962339 Exercise 26
Computing payroll amounts considering Social Security tax ceilings
Suppose you work for MRK, the accounting firm, all year and earn a monthly salary of $5,700. There is no overtime pay. Your withheld income taxes consume 15% of gross pay. In addition to payroll taxes, you elect to contribute 5% monthly to your retirement plan. MRK also deducts $150 monthly for your co-pay of the health insurance premium.
Requirement
1. Compute your net pay for November. Use 7.65% FICA tax rate and assume the 2010 FICA wage ceiling of $106,800 applies.
Suppose you work for MRK, the accounting firm, all year and earn a monthly salary of $5,700. There is no overtime pay. Your withheld income taxes consume 15% of gross pay. In addition to payroll taxes, you elect to contribute 5% monthly to your retirement plan. MRK also deducts $150 monthly for your co-pay of the health insurance premium.
Requirement
1. Compute your net pay for November. Use 7.65% FICA tax rate and assume the 2010 FICA wage ceiling of $106,800 applies.
Explanation
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Financial & Managerial Accounting 3rd Edition by Charles Horngren,Harrison, Walter,Suzanne Oliver
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