Question

Dan Noll's gross earnings for the week were $2,150, his federal income tax withholding was $346, and his FICA total was $164.

A) What was Noll’s net pay for the week? (Round answer to 0 decimal places, e.g. 5,275.)

B) Journalize the entry for the recording of his pay in the general journal. (Note: Use Salaries and Wages Payable: not Cash.) (Round answers to 0 decimal places, e.g. 5,275. Assume FICA rate of 7.65%.)

C) Record the issuing of the check for Noll’s pay in the general journal. (Round answers to 0 decimal places, e.g. 5,275. Assume FICA rate of 7.65%.)

Answer 1

SOLUTION

A. Net pay = Gross pay - FICA taxes - Federal income tax

= $2,150 - 164 - 346

= $1,640

B & C. Journal entries-

S.No.	Accounts titles and Explanation	Debit ($)	Credit ($)
B.	Salaries and wages expense	2,150
	Federal income tax payable		346
	FICA taxes payable		164
	Salaries and wages payable		1,640
C.	Salaries and wages payable	1,640
	Cash		1,640