Question

Following are some transactions and events of Business Solutions Feb. 26 The company paid cash to Lyn Addie for eight days' work at $150 per day. Mar. 25 The company sold merchandise with a $2,600 cost for $3,300 on credit to wildcat Services, invoice dated March 25. Required: 1. Assume that Lyn Addie is an unmarried employee. Her $1200 of wages have deductions for FICA Social Security taxes, FICA Medicare taxes, and federal income taxes. Her federal income taxes for this pay period total $120. Compute her net pay for the eight days' work paid on February 26. (Round your answer to 2 decimal places. Do not round Intermediate calculations.) 2 Record the journal entry to reflect the payroll payment to Lyn Addie as computed in part 1. (Round your answers to 2 decimal places. Do not round intermediate calculations.) 3. Record the journal entry to reflect the employer) payroll tax expenses for the February 26 payroll payment. Assume Lyn Addie has not met earnings limits for FUTA and SUTA (the FUTA rate is 0.6% and the SUTA rate is 5.4% for the company. (Round your answers to 2 decimal places. Do not round intermediate calculations.) 4. Record the entries for the merchandise sold on March 25 if a 4% sales tax rate applies (Round your answers to the nearest whole dollar.) Complete this question by entering your answers in the tabs below Required 1 Required 2 Required 3 Required 4 Assume that Lyn Addie is an unmarried employee. Her $1,200 of wages have deductions for FICA Social Security taxes, FICA Medicare taxes, and federal income taxes. Her federal income taxes for this pay period total $120. Compute her net pay for the eight days' work paid on February 26. Net pay Required 2 >

Answer 1

Answer 1
Calculation of Net pay
Particulars	Amount
Gross pay	$ 1,200.00
Less: taxes
Federal Income tax	$    120.00
FICA taxes
Social Security @6.2%	$      74.40
Medicare tax @ 1.45%	$      17.40
Net Pay	$    988.20
Answer 2
Account Title	Debit	Credit
Salaries Expense	$ 1,200.00
Federal Income tax Payable		$    120.00
FICA Social Security tax payable		$      74.40
FICA Medicare tax payable		$      17.40
Salaries Payable		$    988.20
(being salary expenses incurred)
Answer-3
Account Title	Debit	Credit
Payroll tax Expense	$    163.80
FICA Social Security tax payable		$      74.40
FICA Medicare tax payable		$      17.40
FUTA payable		$        7.20
SUTA Payable		$      64.80
(being employer tax recorded)
Answer-4
Account Title	Debit	Credit
Accounts Receivable	$ 3,432.00
Sales Revenue		$ 3,300.00
Sales tax Payable		$    132.00
(being sales recorded)