Tax Information and Financial Problems

Tax Information

Social Security: 6.2% of the first $142,800 of gross wages for the year

Medicare: 1.45% of all gross wages for the year

Additional Medicare is 0.9% of gross wages over $200,000

FUTA: 0.6% of the first $7000 of gross earnings for the year

SUTA: tax the first $14,000 of gross earnings for the year

0.10% for government employees

6.00% for construction workers

2.70% for other types of employment

1. a) Change 24.1% into a decimal. Do not round.

b) Change 2.002 into a percent. Do not round.

2. A retail business generates an average income of $671,399 per month. If 8.6% of its income is net profit, how much profit will the business have in an average month?

3. Last year, Tom’s house was appraised at $187,505, and this year it was appraised at $244,320. What was the percent change in the appraised value? Give your answer in percent form with two decimal places.

4. Total sales at Carla’s Restaurant are up 5.6% over last year. If sales this year are $371,100, then what were the sales last year? Round to the nearest dollar.

5. Alice earns $5820 monthly. What is the equivalent weekly rate? Round to the nearest cent.

6. Jackson earns $10.98 per hour with time-and-a-half paid for working over 8 hours per day. He worked:

10 hours on Monday

7 hours on Tuesday

8 hours on Wednesday

11 hours on Thursday

8 hours on Friday

0 hours on Saturday and Sunday

What will be the amount of his gross pay for that week? Round to the nearest cent.

7. Danny earns a 7.5% commission on the first $7885 worth of sales each month and 9.1% on all sales in vexcess of $7885. He sold $22,931 worth of merchandise this month. What is his commission? Round to the nearest cent.

8. Audrey’s prior cumulative gross earnings were $138,407, and her gross earnings the next week are $6346. Assume taxes on prior earnings have already been paid, and round to the nearest cent. What is the next week’s Social Security deduction?

9. (8 points) Elizabeth is a construction employee. She earned $4939 during the first quarter of the year and $4820 during the second quarter of the year. For the second quarter of the year,

a. How much did her employer owe in SUTA for employing Elizabeth?

b. How much did her employer owe in FUTA for employing Elizabeth?

10. (12 points) Frank is single and claims 3 allowances and 2 child tax credits. If the wages on his most recent monthly paycheck were $5814, and his prior cumulative earnings were $13,970, find the net pay on his most recent paycheck. Assume taxes on prior earnings have already been paid, and round to the nearest cent.

11. (8 points) A printer costs a dealer $199.95. Operating expenses are 45% of net cost. If the dealer sells the printer for $367.88, is there a net profit or an operating loss, and by how much? Round to the nearest cent.

12. What is the single discount equivalent for a 30/25/5 series discount? Give the answer in percent form to two decimal places.

13. An invoice is dated July 1, and the good were received on July 3. The total after trade discounts is $754.

Terms are 2/10, 1/20. What amount should be paid on July 12?

14. An item was marked up from $1009 to $1334. Find the percent markup on selling price.

15. A retailer sells an appliance for $1606 and experiences 7% shrinkage. To cover shrinkage, what should be the new price of the appliance?

16. (8 points) A store purchases a lawnmower from the manufacturer for $849 and marks it up 60% on cost.

a. What is the new price of the lawnmower?

b. The lawnmower does not sell, so the store manager marks it down 35% for a summer sale. What is the price of the lawnmower now?

17. Find the ordinary interest earned on $2055 at 4.6% from May 3 to October 18.

18. A deposit was made into a savings account which pays 3.3% simple interest. After 3 years, $617 interest was paid. What was the size of the deposit? Round to the nearest cent.

19. Find the number of months needed for an investment of $7190 to grow to $7784 if 4.2% simple interest is paid. Round to a whole number of months.