Question

Sharon Strand's regular hourly wage rate is $22. and she receives an hourly rate of $33 for work in excess of 40 hours. During a january pay period. Sharon works 46 hours. Sharon's federal income tax withholding is $92.00 and she has no voluntary deductions. Assume that the FICA tax rate is 7.65% Prepare the employer's journal entries to record(a) Sharon's pay for the period and (b) the payment of Sharon's wages. Use January 15 for the end of the pay period and the payment date. (Round answers to 2 decimal places 15.25. Credit account titles are automatically indented when amount is entered. Do not indent manually No. Date Account Titles and Explanation Debit Credit (a) Jan. 15 th Jan 15

Answer 1

Normal pay rate = $22 per hour

Overtime pay rate = $33 per hour

Normal working time = 40 hours

Overtime = 6 hours

Total wages expenses = Normal pay rate x Normal working time + Overtime pay rate x Overtime

= 22 x 40 + 33 x 6

= 880+198

= $1,078

FICA tax rate = 7.65%

FICA tax payable = Total wages expenses x FICA tax rate

= 1,078 x 7.65%

= $82.47

No.	Date	Account Titles and Explanation	Debit	Credit
(a)	Jan. 15	Wages expense	$1,078
		Federal income tax payable		$92
		FICA taxes payable		$82.47
		Wages payable		$903.53
(b)	Jan. 15	Wages payable	$903.53
		Cash		$903.53

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