5-5A-LO 3 E% Similar to Example 3-1 on pages 3-10 and 3-11 In 20- the annual sal

Question

5-5A-LO 3 E% Similar to Example 3-1 on pages 3-10 and 3-11 In 20- the annual salaries paid each of the officers of Abrew, Inc., follow. The officers are paid semimonthly on the and the last day of the month. Compute the FICA taxes to be withheld from each officer's pay on (a) November 15 and (b) December 31 November 15 Annual OASDI Taxable OASDI Salary HI Taxable Earnings HI Name and Title Earnings Tax ax Hanks, Timothy, President 141.600 Grath, John, VP Finance James, Sally, VP Sales Kimmel, Joan, VP Mfg. Wie, Pam, VP Personnel Grant, Mary, VP Secretary 119,000 69,600 54,000 51,600 49,200 b. December 31 HI Taxable Earnings Annual OASDI Taxable OASDI HI Name and Title Salary Earnings Tax Hanks, Timothy, President Grath, John, VP Finance James, Sally, VP Sales Kimmel, Joan, VP Mfg. Wie, Pam, VP Personnel Grant, Mary, VP Secretary $141,600 119,000 69,600 54,000 51,600 49,200

Explanation / Answer

If we take 2017 as base year, as year not mentioned so for OASDI limit is $127200 15-Nov Name and Title Annual Salary Upto Oct 31 Salary/24*20 months Semimontly salary =salary/24 OASDI Taxable O OASDI Tax HI Taxable HI Tax Salary Earnings (O*6.2%) Earnings H H*1.45% Hanks, Timothy, President $141,600 $118,000 $5,900 $5,900 $365.80 $5,900 $85.55 Grath, John VP Finance 119,000 $99,167 $4,958 $4,958 $307.42 $4,958 $71.90 James, Sally, VP Sales 69,600 $58,000 $2,900 $2,900 $179.80 $2,900 $42.05 Kimmel, Joan VP MFG 54,000 $45,000 $2,250 $2,250 $139.50 $2,250 $32.63 Wie, Pam, VP Personnel 51,600 $43,000 $2,150 $2,150 $133.30 $2,150 $31.18 Grant, Mary, VP Secretary 49,200 $41,000 $2,050 $2,050 $127.10 $2,050 $29.73 31-Dec Name and Title Annual OASDI Taxable O OASDI Tax HI Taxable HI Tax Salary Earnings (O*6.2%) Earnings H H*1.45% Hanks, Timothy, President $141,600 3300 $204.60 $5,900 85.55 (127200-118000-5900) Grath, John VP Finance 119,000 4,958 $307.42 $4,958 $71.90 James, Sally, VP Sales 69,600 2,900 $179.80 $2,900 $42.05 Kimmel, Joan VP MFG 54,000 2,250 $139.50 $2,250 $32.63 Wie, Pam, VP Personnel 51,600 2,150 $133.30 $2,150 $31.18 Grant, Mary, VP Secretary 49,200 2,050 $127.10 $2,050 $29.73 If any doubt please comment If 2016 base year is assumed than limit is $118500 15-Nov Name and Title Annual Salary Upto Oct 31 Salary/24*20 months Semimontly salary =salary/24 OASDI Taxable O OASDI Tax HI Taxable HI Tax Salary Earnings (O*6.2%) Earnings H H*1.45% Hanks, Timothy, President $141,600 $118,000 $500 $500 $31.00 $500 $7.25 Grath, John VP Finance 119,000 $99,167 $4,958 $4,958 $307.42 $4,958 $71.90 James, Sally, VP Sales 69,600 $58,000 $2,900 $2,900 $179.80 $2,900 $42.05 Kimmel, Joan VP MFG 54,000 $45,000 $2,250 $2,250 $139.50 $2,250 $32.63 Wie, Pam, VP Personnel 51,600 $43,000 $2,150 $2,150 $133.30 $2,150 $31.18 Grant, Mary, VP Secretary 49,200 $41,000 $2,050 $2,050 $127.10 $2,050 $29.73 31-Dec Name and Title Annual OASDI Taxable O OASDI Tax HI Taxable HI Tax Salary Earnings (O*6.2%) Earnings H H*1.45% Hanks, Timothy, President $141,600 0 $0.00 $500 7.25 Grath, John VP Finance 119,000 4,958 $307.42 $4,958 $71.90 James, Sally, VP Sales 69,600 2,900 $179.80 $2,900 $42.05 Kimmel, Joan VP MFG 54,000 2,250 $139.50 $2,250 $32.63 Wie, Pam, VP Personnel 51,600 2,150 $133.30 $2,150 $31.18 Grant, Mary, VP Secretary 49,200 2,050 $127.10 $2,050 $29.73

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