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BMX Company has one employee. FICA Social Security taxes are 6.2% of the first [tex]$137,700 paid to its employee, and FICA Medicare taxes are 1.45% of gross pay. For BMX, its FUTA taxes are 0.6% and SUTA taxes are 5.4% of the first $[/tex]7,000 paid to its employee.

Compute BMX's amounts for each of these four taxes as applied to the employee's gross earnings for September under each of three separate situations (a), (b), and (c).

Note: Round your answers to 2 decimal places.

Sagot :

GinnyAnswer
### Given Data:
- Social Security tax rate: [tex]\(6.2\%\)[/tex]
- Medicare tax rate: [tex]\(1.45\%\)[/tex]
- FUTA tax rate: [tex]\(0.6\%\)[/tex]
- SUTA tax rate: [tex]\(5.4\%\)[/tex]
- Social Security limit: [tex]\(\$137,700\)[/tex]
- FUTA and SUTA limit: [tex]\(\$7,000\)[/tex]

### Gross Earnings:
- Situation (a): \[tex]$5,000 - Situation (b): \$[/tex]7,000
- Situation (c): \[tex]$8,000 ### Calculating Taxes: #### Situation (a): Gross Earnings = \$[/tex]5,000
1. Social Security Tax:
[tex]\[ \text{Social Security Tax} = 0.062 \times \$5,000 = \$310.00 \][/tex]

2. Medicare Tax:
[tex]\[ \text{Medicare Tax} = 0.0145 \times \$5,000 = \$72.50 \][/tex]

3. FUTA Tax:
[tex]\[ \text{FUTA Tax} = 0.006 \times \$5,000 = \$30.00 \][/tex]

4. SUTA Tax:
[tex]\[ \text{SUTA Tax} = 0.054 \times \$5,000 = \$270.00 \][/tex]

#### Situation (b): Gross Earnings = \[tex]$7,000 1. Social Security Tax: \[ \text{Social Security Tax} = 0.062 \times \$[/tex]7,000 = \[tex]$434.00 \] 2. Medicare Tax: \[ \text{Medicare Tax} = 0.0145 \times \$[/tex]7,000 = \[tex]$101.50 \] 3. FUTA Tax: \[ \text{FUTA Tax} = 0.006 \times \$[/tex]7,000 = \[tex]$42.00 \] 4. SUTA Tax: \[ \text{SUTA Tax} = 0.054 \times \$[/tex]7,000 = \[tex]$378.00 \] #### Situation (c): Gross Earnings = \$[/tex]8,000
1. Social Security Tax:
[tex]\[ \text{Social Security Tax} = 0.062 \times \$8,000 = \$496.00 \][/tex]

2. Medicare Tax:
[tex]\[ \text{Medicare Tax} = 0.0145 \times \$8,000 = \$116.00 \][/tex]

3. FUTA Tax:
[tex]\[ \text{FUTA Tax} = 0.006 \times \$7,000 = \$42.00 \][/tex]

4. SUTA Tax:
[tex]\[ \text{SUTA Tax} = 0.054 \times \$7,000 = \$378.00 \][/tex]

### Summary of Calculations:
Situation (a): Gross Earnings = \[tex]$5,000 - Social Security Tax: \$[/tex]310.00
- Medicare Tax: \[tex]$72.50 - FUTA Tax: \$[/tex]30.00
- SUTA Tax: \[tex]$270.00 Situation (b): Gross Earnings = \$[/tex]7,000
- Social Security Tax: \[tex]$434.00 - Medicare Tax: \$[/tex]101.50
- FUTA Tax: \[tex]$42.00 - SUTA Tax: \$[/tex]378.00

Situation (c): Gross Earnings = \[tex]$8,000 - Social Security Tax: \$[/tex]496.00
- Medicare Tax: \[tex]$116.00 - FUTA Tax: \$[/tex]42.00
- SUTA Tax: \$378.00
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