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1. For the month of December, Barry Rich's gross pay was $80,000. Federal income taxes withheld...

1. For the month of December, Barry Rich's gross pay was $80,000. Federal income taxes withheld totals $11,000. The FICA (Social Security and Medicare) rate is 7.65%. What is Barry's net pay?

2. Sew Chic, Inc., has employees that earn a monthly gross pay of $500,000. The federal tax rate is 20%. FICA withholdings is 7.65%. What will Sew Chic report as its Salary Expense?

3. For the month of December, Melon-Cauli Grocers, Inc.'s gross payroll was $600,000. Federal income taxes withheld equal 20% of gross payroll. The FICA rate is 7.65%. How much will Melon-Cauli's tax have to pay the government agencies? Remember that the company is responsible for paying both the employee's and the company's share of FICA.

4. Jerry and Mary's adjusted gross income is $77,200 on line 7 of Form 1040. Line 17 on Schedule A is $27,000 and the standard deduction for married taxpayers filing jointly is $24,000. What should be entered on line 8 of Form 1040?

5. Theresa Brown's adjusted gross income is $53,000 on line 7 of Form 1040. Line 17 on Schedule A is $14,000 and the standard deduction for a single taxpayer is $12,000. What should be entered on line 10 of Form 1040?

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1) For the month of December, Barry Rich's gross pay was $80,000. Federal income taxes withheld totals $11,000. The FICA (Social Security and Medicare) rate is 7.65%. What is Barry's net pay?
Net Pay = Gross Pay - Withholdings
Gross Pay $     80,000.00
Federal income tax withholding: $    (11,000.00)
FICA withholding: 6.20% x 80000 $      (4,960.00)
Medicare withholding = 1.45% x 80000 $      (1,160.00)
Net Pay = $     62,880.00
2. Sew Chic, Inc., has employees that earn a monthly gross pay of $500,000. The federal tax rate is 20%. FICA withholdings is 7.65%. What will Sew Chic report as its Salary Expense?
Salary Expenses (Shareholder equity) $  5,00,000.00
Gross Pay $  5,00,000.00
FICA withholding: 6.20% x 500000 $    (31,000.00)
Medicare withholding = 1.45% x 500000 $      (7,250.00)
Net Pay = Cash = Assets $  4,61,750.00
Liabilites (31000+7250) $    (38,250.00)
3. For the month of December, Melon-Cauli Grocers, Inc.'s gross payroll was $600,000. Federal income taxes withheld equal 20% of gross payroll. The FICA rate is 7.65%. How much will Melon-Cauli's tax have to pay the government agencies? Remember that the company is responsible for paying both the employee's and the company's share of FICA.
Gross Pay $  6,00,000.00
Federal income tax withholding: = 600000 x 20% $ (1,20,000.00)
FICA withholding: 6.20% x 600000 $    (37,200.00)
Medicare withholding = 1.45% x 600000 $      (8,700.00)
Net Pay = $  4,34,100.00
The company will pay a total equal to Federal Income Taxes Withheld + ((FICA + Medicare Withheld) x 2)
The company will pay a total equal to 120000+((37200+8700)x2)) $  2,11,800.00
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