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Unformatted text preview: fers you a starting salary of $30,000 with a 2% bonus (on salary) if you can bring 10 new
clients into the firm. The other company, The Patterson Group, offers a salary of $25,000
plus a 3% commission on all new client billings. If you bring 10 new clients to Bryson,
what would the amount of your bonus be? How much in new business would you have to
bring to Patterson to equal the bonus from Bryson? Which offer seems to have the higher
earnings potential? Why? Problem 12–1 Calculating Gross Earnings
Cleary’s Music Center has nine employees. The employees are paid weekly with overtime
after 40 hours per week. The overtime rate is 1½ times the regular rate of pay. Payroll
information for the week ending June 12 follows:
Kevin Wallace Pay Rate
46 Instructions Prepare a form similar to the one that follows. Calculate regular earnings,
overtime earnings, and gross earnings for each employee.
Rate Clune, David 314 Total
331/2 $6.95 Regular Overtime
$232.83 –0– Gross
$232.83 Chapter 12 Payroll Accounting 308-337_CH12_868829.indd 314 9/15/05 11:44:46 AM SECTION 2 Payroll Deductions Whether you work at Target, McDonald’s, or CompUSA, your earnings and deductions are determined in the same way. In this section you
will compute the amounts withheld from an employee’s earnings.
The first time you received a payroll check, you were probably surprised that its amount was less than you expected. Various amounts had
been taken out of your gross earnings. An amount subtracted from gross
earnings is a deduction . Deductions include those required by law and
those an employee wishes to have withheld from earnings. Main Idea Deductions Required by Law ® the deductions required What Amounts Must Be Deducted from Earnings?
An employer is requ...
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