# payroll accounting 2017

Question #1

Karen and Katie are looking at the company’s health care options and trying to determine how much their net pay will decrease if they sign up for the qualified cafeteria plan offered by the company. Karen, a married woman with four exemptions, earns \$2,000 per biweekly payroll. Katie, a single woman with one exemption, also earns \$2,000 per biweekly payroll. The biweekly employee contribution to health care that would be subject to the cafeteria plan is \$100. Compute the taxable income for Karen and Katie.

Karen’s taxable income if she declines to participate in the cafeteria plan \$___

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Karen’s taxable income if she particitipate in the cafeteria plan \$___

Katie’s taxable income if she declines to participate in the cafeteria plan \$____

Katies’s taxable income if she participate in the cafeteria \$______

Question \$ 2

Karen and Katie are looking at the company’s health care options and trying to determine how much their net pay will decrease if they sign up for the qualified cafeteria plan offered by the company. Karen, a married woman with four exemptions, earns \$2,000 per biweekly payroll. Katie, a single woman with one exemption, also earns \$2,000 per biweekly payroll. The biweekly employee contribution to health care that would be subject to the cafeteria plan is \$100. Compute the net pay for Karen and Katie. Assume that they are subject to federal income tax (using the wage-bracket method) and FICA taxes and have no other deductions from their pay. When wages fall on the end of a bracket, use the lower end. Use the Wage Bracket Method Tables for Income Tax Withholding inAppendix C. (Round your answers to 2 decimal places.)

Karenâ€™s net pay if she declines to participate in the cafeteria plan \$______

Karenâ€™s net pay if she participate in the cafeteria plan \$_____

Katieâ€™s net pay if she declines to participate in the cafeteria plan\$____

Katieâ€™s net pay if she participate in the cafeteria plan \$______

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