Question

Brief Exercise 10-6 

Betsy Strand's regular hourly wage rate is $28, and she receives an hourly rate of $42 for work in excess of 40 hours. During a January pay period, Betsy works 47 hours. Betsy's federal income tax withholding is $88, 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, .. 15.25. Credit account titles are automatically indented when amount is entered. Do not indent manually.) 

No. Date Account Titles and Explanation Credit (a) Jan. 15 (b) Jan. 15 Click if you would like to show Work for this question: 

Answer 1

Answer :

No.	Date	Account Title and Explanation	Debit	Credit
(a)	Jan. 15	Salaries and Wages Expense	$1,414
		Federal Income taxes Payable	$88
		FICA Taxes Payable		$108.17
		Salaries and Wages Payable		$1,393.83
		(To record Betsy's pay for the period)
(b)	Jan. 15	Salaries and Wages Payable	$1,393.83
		Cash		$1,393.83
		(To record the payment of Betsy's wages)

Salaries and Wages Expense = ($28 x 40) + ($42 x 7) = 1,120 + 294 = $1,414

FICA Taxes Payable = $1,414 x 7.65% = $108.17

Salaries and Wages Payable = $1,414 + $88 - $108.17 = $1393.83