Question

Parry Paint LLC started operations on January 1, 2019. It had the following payroll transactions during the year. On January 15, the company paid employee B. Vaugh $1560 for her January 1-15 salary. The company matches FICA deductions. Calculate the following:

Gross Pay=$2,000

Income Taxes 15%=

FICA Social Security 6.2%=

FICA Medicare 1.45%=

Total deductions=

Net pay=

Required: Calculate B. Vaughns's net pay.  

Answer 1

The B. Vaughn's net pay is calculated as follows:

Particulars	Amount ($)
Gross pay (A)	2,000
Deductions:
Income taxes (2000 *15%)	300
FICA Social security (2000 * 6.2%)	124
FICA Medicare tax (2000 * 1.45%)	29
Total Deductions (B)	453
Net Pay (A - B)	1,547

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Answer 2

Gross Pay	Deductions
	Income taxes	FICA Social Security	FICA Medicare	Total deductions	Net Pay
		6.20%	1.45%
2000	287	124	29	440	1560
The company matches FICA deductions.
Required:
Calculate B. Vaughn’s net pay and journalize the entries to record her payroll.
Prepare journal entries to record the above transactions. Show necessary calculations.
Date	Account Names	Debit	Credit
	Salary Expense	$ 2,000.00
	FICA Taxes Payable (124+29)		$     153.00
	Federal Income Tax Payable		$     287.00
	Salaries Payable		$ 1,560.00
	Salaries Payable	$ 1,560.00
	Cash		$ 1,560.00
	Fica Tax Expenses	153
	FICA Taxes Payable (124+29)		153
	To record employer contributions

Answer 3

Gross pay--$2,000

FICA Social Security = 2,000 x 6.2%

= $124

FICA Medicare = 2,000 x 1.45%

= $29

Net pay = $1,560

Net Pay = Gross pay - Income tax - FICA Social security tax - FICA medicare tax

1,560 = 2,000 - Income tax - 124 - 29

Income tax = $287

Kindly comment if you need further assistance

Answer 4

a.

Gross Pay	Deductions				Net Pay
	Income taxes 15%	FICA Social Security 6.2%	FICA Medicare 1.45%	Total deductions
2000	300	124	29	453	1547

*$1560 cash was paid to employee but as per calculations net pay is $1547. Kindly recheck and comment below if there is any correction.

b.

Date	General Journal	Debit	Credit
Jan. 15	Salaries expense	2000
	Employee income taxes payable (15% x $2000)		300
	FICA social security payable (6.20% x $2000)		124
	FICA medicare payable (1.45% x $2000)		29
	Cash		1547
	(To record salary paid)
Jan. 15	Payroll tax expense	153
	FICA social security payable		124
	FICA medicare payable		29
	(To record employer's payroll tax expense)