Question

In: Accounting

Laura Brown worked 46 hours for Baskin Robbins during the last 7-day pay period. Laura is...

Laura Brown worked 46 hours for Baskin Robbins during the last 7-day pay period. Laura is paid $24.00 per hour and time and a half for any hours worked past 40 hours per week. The state and federal income tax rates applicable to Laura are 12% and 22%, respectively. The FICA tax rate is 8%. Laura instructed her employer to withhold $120 for charitable contributions. In addition, Laura participates in the employer-sponsored medical plan which costs her $60 per pay period in premiums withheld. Prior to this pay period, Laura’s year to date gross earnings were $35,000.

Prepare the calculation of Laura’s net pay. (SHOW ALL WORK)

Solutions

Expert Solution

Answer

1.Statement showing Calculation of Laura's Net Pay from Baskin Robbins

Gross Earning of M/s Laura prior to Employment with Baskin Robbins $35000

Gross Earnings from Baskin Robbins $ 1176

Gross Total Earnings before Taxes $ 36176

Deductions

Charitable Contributions $ 120

Employer Sponsored Medical Plan $ 240

Total Deductions $ 360

Net Earnings Before Taxes $ 35816.00

FICA Tax @ 8% $ 2865.28

State Tax @ 12% $ 4297.92

Federal Tax @ 22% $ 7879.52

Total Taxes $ 15042.72

Net Earnings after Tax $ 20773.28

Taxes Withheld by Baskin Robbins $ 267.12

Net Tax to be Paid $ 14775.60

2.Net Payout after taxes from Baskin Robbins

Gross Earnings From Current Employer $ 1176

Deductions

Charitable contributions $ 120

Employer sponsored medical plan $ 420

Total Deductions $ 540

Net Income Before Taxes from Baskin Robins $ 636

Taxes withheld

FICA + State +Federal Taxes $ 267.12

Net Pay Out AfterTaxes from Baskin Robins $ 368.88

Workings

1. Calculation of Gross income of Laura. from Baskin Robins

Total Hours Worked = 46 Hours

Normal Pay per Hour = $24

Bonus pay for extra hours past 40 Hours = 1/2 of Time Pay/Hour

ie = $12

Therefore Total Pay = (46 Hours x $24) + (6Hours x $12)

= $1104 + $72

= $1176

ekkarill92 answered 1 year ago

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