Task 1 requires students to determine whether the five employees meet the criteria for the firm to be eligible for the social security tax exemption in the current year, and subsequently for the tax credit in the following year. Students are asked to quantify these two amounts and to write up their results in a memo to Gretchen, the CEO. At this point in the case (prior to seeing the payroll as part of Task 2), in addition to not knowing the exact number of hours that employees will work (or the exact amount of bonus or tips that the employee might earn), there is not enough information for students to calculate the impact of two nuances:
The solution to Task 1 below assumes these two nuances are initially ignored for the purposes of completing Task 1 of the case. We include them in the solution to Task 2 of...
