Question

eBook Show Me How Calculator Calculate Payroll An employee earns $30 per hour and 1.5 times that rate for all hours in excess of 40 hours per week. If the employee worked 54 hours during the week Assume that the social security tax rate is 6.0%, the Medicare tax rate is 1.5%, and the employee's federal income tax withheld is $295. a. Determine the employee's gross pay for the week. b. Determine the employee's net pay for the week. Round your answer to two decimal places. $ 1,438.50 x Feedback Check My Work Gross pay represents the total earnings of an employee for a specific pay period, prior to taxes and deductions. Net pay is also known as take- Nhome pay.

Answer 1

Solution Question # 1 Computation of Employee's Gross pay Total hours worked during the week Hours to be paid at hourly wage rate $30 54 Hours 40 Hours Hours to be paid at hourly wage rate 1.5 times of $30 (54 hours 40 Hours) 14 Hours Gross wages ($30 x 40 hours) ($30 x 1.5 x 14 hours) $1,830 Gross pay for the week $1,830.00 Computation of Employee's Net pay for the week Step-1: Computation of taxes and deductions $109.80 Social security tax withheld ($1,830 x 6%) Medicare tax with held ($1,830 x 1.5%) $27.45 Federal income tax withheld $295.00 $432.25 Taxes and deductions Step-2: Computation of Net pay Gross Pay $1,830.00 Less: Taxes withheld and deductions ($432.25) $1,397.75 Net pay Net pay for the week $1,397.75 Question #2 Amount of notes payable $60,000 Rate of interest 5% 120 days Period Interest expense to be paid on maturity $60,000 x 5% x 120/360 $1,000 Journal entries Account Titles and Explanation Transaction Debit Credit Accounts Payable $60,000 (a) Notes Payable $60,000 (To record issue of notes to the creditor) Account Titles and Explanation Transaction Debit Credit Notes Payable (b) $60,000 $1,000 Interest expense $61,000 Cash (To record payment of note and interest at maturity)