Mission Company Has Three Employees The Compary Is Subject to the Following Taxes

question 36

Multiple Choice

Mission Company has three employees: $\begin{array}{llr}&\text { Gross Pay through July }&\text { Gross Pay for August }\\\text { Smith } & \$ 3,200 & \$ 1,000 \\\hline \text { Cain } & 25,800 & 3,500 \\\hline \text { Clark } & 94,600 & 13,100\end{array}$
The compary is subject to the following taxes: $$\begin{array} { l c l } \text { Tax } & \text { Rate } & \text { Applied To } \\\text { FICA-Social Security } & 6.20 \% & \text { First } \$ 106,800 \\\text { FICA-Medicare } & 1.45 & \text { All gross pay } \\\text { FUTA } & .80 & \text { First } \$ 7,000 \\\text { SUTA } & 5.40 & \text { First } \$ 7,000\end{array}$$ What is the amount that Mission Company will withhold from Clark's August gross pay?

• A) $ 946.35
• B) $1,002.15
• C) $1,814.35
• D) $6,234.75
• E) $812.20

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Definitions:

Incorporators

Incorporators are individuals or entities that are involved in creating and registering a corporation with the relevant state authority, completing and filing its articles of incorporation.

Federal Income Tax

A tax levied by the IRS on the annual earnings of individuals, corporations, trusts, and other legal entities.

Legally Operate

To conduct business activities in accordance with the laws and regulations of the jurisdiction in which the business exists.

Accrual Basis

An accounting method where transactions are recorded when they are earned or incurred, regardless of when cash transactions occur.