Question

Brief Exercise 10-6 Your answer is partially correct. Try again. Betsy Strand's regular hourly wage rate is $16, and she receives an hourly rate of $24 for work in excess of 40 hours. During a January pay period, Betsy works 47 hours. Betsy's federal income tax withholding is $91, and she has no voluntary deductions. Assume that the FICA tax rate is 7.65%. Prepare the employer's journal entries to record (a) Betsy's pay for the period and (b) the payment of Betsy's wages. Use January 15 for the end of the pay period and the payment date. (Round answers to 2 decimal places, e.g. 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 Salaries and Wages Expense 808 Federal Income Taxes Payable 95 FICA Taxes Payable 61.81 Salaries and Wages Payable 651.19 X (b) Jan. 15 Salaries and Wages Payable 651.19 Cash 651.19

Answer 1

Answer:

Gross pay $ 808

Net pay $ 655.19

Explanation:

40 x 16 weekly normal rate = $ 640

7 x 24 overtime = $ 168

Gross pay $808

Deductions:

Federal income        $ 91.00                              

FICA 7.65 of 808           $ 61.812                           

Total deduction (152.81)                  

Net pay $ 655.19                   

For the gross pay, we will multiply the 40 weekly hours by the normal rate

And the excess hours by the overtime rate.

Then, for deductions, we will multiply the gross pay by the FICA rate.

JOURNAL ENTRY

(a) Jan 15   Salaries and Wages Exp.            808

                              Federal Income Taxes Payable              91

                              FICA Taxes Payable                                61.81

                              Salaries and Wages Payable                 655.19   

    

(b) Jan 31   Salaries and Wages Payable        655.19

Cash 655.19

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