Question

M M MJ LU2 , 3, 2 Following are some transactions and events of Business Solutions. Feb. 26 The company paid cash to Lyn Addie for eight days' work at $130 per day. Mar. 25 The company sold merchandise with a $2,800 cost for $3,100 on credit to Wildcat Services, invoice dated March 25. Required: 1. Assume that Lyn Addie is an unmarried employee. Her $1,040 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 $104. 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 Addle 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 dollor.) Answer is complete but not entirely correct. Complete this question by entering your answers in the tabs below. < Prey 6 of 6 Next > ere to search O em • OOO

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Answer 1

В Amount 1040 64.48 15.08 104 856.44 Debit A 1 Particulars 2 Wages 3 Social security tax (6.2%) 4 Medicare tax (1.45%) 5 Income Tax 6 Net Pay 7 8 Accounts titles and explanation 9 Salaries and wages Expense Social security tax Medicare tax 12 Income tax Cash 14 payroll payment to Lynn addle recorded 15 16 17 Accounts titles and explanation 18 Payroll tax expense Social security tax Medicare tax Federal unemployment tax State unemployment Tax Payroll tax expense recorded Credit 1040 64.48 15.08 104 856.44 13 Debit Credit 127.4 64 48 24 6.24 41.6 Debit 25 Federal unemployment tax (0.6%) 26 State unemployment Tax (4%) 27 28 Accounts titles and explanation 29 Accounts receivable Earned Service revenue 31 Sales tax payable March sales with 4% sales tax recorded Credit 3224 3100 30 32 33 34 COGS 2800 2800 Merchandise Inventory COGS Recorded 36 37

Amount 1 Particulars 2 Wages 3 Social security tax (6.2%) 4 Medicare tax (1.45%) 5 Income Tax 6 Net Pay 1040 =+B2*6.2% =+B2*1.45% 104 =+B2-SUM(B3:35) Credit Debit =+B2 8 Accounts titles and explanation 9 Salaries and wages Expense 10 Social security tax Medicare tax 12 Income tax Cash 14 payroll payment to Lynn addle recorded =+B3 =+B4 =+B5 =+B6 16 17 Credit =+B3 =+B4 =+B25 =+B26 Accounts titles and explanation Debit 18 Payroll tax expense 127.4 Social security tax Medicare tax Federal unemployment tax State unemployment Tax 23 Payroll tax expense recorded 24 25 Federal unemployment tax (0.6%) =1040*0.6% 26 State unemployment Tax (4%) =1040*4% 27 28 Accounts titles and explanation Debit 29 Accounts receivable =+C30+C31 Earned Service revenue Sales tax payable March sales with 4% sales tax recorded Credit 3100 =+C30*4% 34 COGS 12800 Merchandise Inventory COGS Recorded