Answer :
Let's go through the steps, one by one, to determine if Chloe's net pay is correct and to identify any discrepancies in the withholdings.
1. Calculate the expected Social Security tax:
[tex]\[ \text{Social Security Tax} = 6.2\% \text{ of gross pay} = 0.062 \times \$856.00 = \$53.072 \][/tex]
The actual Social Security tax withheld was \[tex]$53.07. Comparing the expected and actual values: \[ \$[/tex]53.072 \neq \[tex]$53.07 \] Thus, the Social Security withholding is not correct. 2. Calculate the expected Medicare tax: \[ \text{Medicare Tax} = 1.45\% \text{ of gross pay} = 0.0145 \times \$[/tex]856.00 = \[tex]$12.412 \] The actual Medicare tax withheld was \$[/tex]12.41. Comparing the expected and actual values:
[tex]\[ \$12.412 \neq \$12.41 \][/tex]
Thus, the Medicare withholding is not correct.
3. Calculate the expected state tax:
[tex]\[ \text{State Tax} = 23\% \text{ of federal tax} = 0.23 \times \$80.00 = \$ 18.40 \][/tex]
The actual state tax withheld was \[tex]$18.40. Comparing the expected and actual values: \[ \$[/tex]18.40 = \[tex]$18.40 \] Thus, the state tax withholding is correct. 4. Calculate the expected net pay: \[ \text{Net Pay} = \text{Gross Pay} - (\text{Federal Tax} + \text{Social Security Tax} + \text{Medicare Tax} + \text{State Tax}) \] \[ \text{Net Pay} = \$[/tex]856.00 - (\[tex]$80.00 + \$[/tex]53.072 + \[tex]$12.412 + \$[/tex]18.40) = \[tex]$692.116 \] The actual net pay was \$[/tex]692.12. Comparing the expected and actual values:
[tex]\[ \$692.116 \neq \$692.12 \][/tex]
Therefore, the net pay is not correct.
Based on the above analysis, the true statements are:
- The net pay is not correct.
- The Social Security tax is not correct.
- The Medicare tax is not correct.
- The state tax is correct.
Given the choices provided:
a. The net pay is correct.
b. The Social Security tax is not correct.
c. The Medicare tax is not correct.
d. The state tax is not correct.
The best answer is:
B. The Social Security tax is not correct.
However, note that "c. The Medicare tax is not correct." is also a correct statement, but the problem asks to select the best answer, which in this case highlights the Social Security withholding discrepancy.
1. Calculate the expected Social Security tax:
[tex]\[ \text{Social Security Tax} = 6.2\% \text{ of gross pay} = 0.062 \times \$856.00 = \$53.072 \][/tex]
The actual Social Security tax withheld was \[tex]$53.07. Comparing the expected and actual values: \[ \$[/tex]53.072 \neq \[tex]$53.07 \] Thus, the Social Security withholding is not correct. 2. Calculate the expected Medicare tax: \[ \text{Medicare Tax} = 1.45\% \text{ of gross pay} = 0.0145 \times \$[/tex]856.00 = \[tex]$12.412 \] The actual Medicare tax withheld was \$[/tex]12.41. Comparing the expected and actual values:
[tex]\[ \$12.412 \neq \$12.41 \][/tex]
Thus, the Medicare withholding is not correct.
3. Calculate the expected state tax:
[tex]\[ \text{State Tax} = 23\% \text{ of federal tax} = 0.23 \times \$80.00 = \$ 18.40 \][/tex]
The actual state tax withheld was \[tex]$18.40. Comparing the expected and actual values: \[ \$[/tex]18.40 = \[tex]$18.40 \] Thus, the state tax withholding is correct. 4. Calculate the expected net pay: \[ \text{Net Pay} = \text{Gross Pay} - (\text{Federal Tax} + \text{Social Security Tax} + \text{Medicare Tax} + \text{State Tax}) \] \[ \text{Net Pay} = \$[/tex]856.00 - (\[tex]$80.00 + \$[/tex]53.072 + \[tex]$12.412 + \$[/tex]18.40) = \[tex]$692.116 \] The actual net pay was \$[/tex]692.12. Comparing the expected and actual values:
[tex]\[ \$692.116 \neq \$692.12 \][/tex]
Therefore, the net pay is not correct.
Based on the above analysis, the true statements are:
- The net pay is not correct.
- The Social Security tax is not correct.
- The Medicare tax is not correct.
- The state tax is correct.
Given the choices provided:
a. The net pay is correct.
b. The Social Security tax is not correct.
c. The Medicare tax is not correct.
d. The state tax is not correct.
The best answer is:
B. The Social Security tax is not correct.
However, note that "c. The Medicare tax is not correct." is also a correct statement, but the problem asks to select the best answer, which in this case highlights the Social Security withholding discrepancy.
