Question

 QUESTION 6

 Mary is single and earned a salary of $145,000 as an Internal Auditor in 2017.

 Please calculate Mary's 2017 Net Pay.

 Note:

 2017 Social Security rate is 6.2% (0.062) 

 2017 Medicare rate is 1.45% (0.0145)

 2017 Social Security threshold is $127,200

 What is Mary's net Pay?

 (Note: No need to show the calculations).

 QUESTION 7

 This is a follow-up from Question 6. Please prepare the Journal Entry in the Company's books to record Mary's Payroll.

Answer 1

Gross Pay=145000

Social Security=2102.5(1.45% of Gross Pay)

Medicare=8990(6.2% of Gross Pay)

FIT=12,340

SIT=11,150

Union Dues=500

Contribution to Church=6000

Net Pay=103,917.5

Journal

Employee Compensation Expenses A/c Dr. 156,092.5

To Cash 103917.5

To Social Security Employee Share 2102.5

To Medicare Employee Share   8990

To SIT 11,150

To FIT   12,340

To Union dues Recovered 500

To Contribution to Church Recovered 6000

To Social Security Employer Share   2102.5

  To Medicare Employer Share   8990  

(Being Final Settlemet to Mary made)  

Social Security Employee Share 2102.5

Medicare Employee Share   8990

SIT 11,150

FIT   12,340

Social Security Employer Share   2102.5

Medicare Employer Share   8990  

To Cash 45,675

(For statutory dues of Mary cleared)

If the employees pay 1.45% of his or her gross wages for Medicare tax and 6.2% for Social Security tax,the employer will pay a matching 1.45% and 6.2%.