Herbert Smith manages a Frosty World drive-in. His straight-time pay is $ 17 per

Question

Herbert Smith manages a Frosty World drive-in. His straight-time pay is $ 17 per hour, with time-and-a-half for hours in excess of 40 per week. Smith's payroll deductions include withheld income tax of 40%, FICA tax, and a weekly deduction of $ 11 for a charitable contribution to United Way. Smith worked 56 hours during the week.

For all payroll calculations, use the following tax rates and round amounts to the nearest cent:

Employee: OASDI: 6.2% on first $118,500 earned;

Medicare: 1.45% up to $ 200,000, 2.35% on earnings above $ 200,000.

Employer: OASDI: 6.2% on first $ 118,500 earned;

Medicare: 1.45% on all earnings;

FUTA: 0.6% on first $ 7,000 earned;

SUTA: 5.4% on first $ 7,000 earned.

1. Compute Smith's gross pay and net pay for the week. Assume earnings to date are $ 11,000.

2. Journalize Frosty World's wages expense accrual for Smith's work. An explanation is not required.

3. Journalize the subsequent payment of wages to Smith.

Explanation / Answer

in $ Ans 1 Gross pay 1088.00 Regualr pay+overtime 1088.00 (40*17)+(16*$17*1.5) Net pay Gross 1088.00 Less: Income tax withheld (1088*40%) 435.2 Less: OASDI 67.5 Less: Medicare taxes (1088*1.45%) 15.8 Less: United way payable 11 Net pay 558.57 ans ans 2 Dr Cr Salaries expenses 1088.00 Federal Income Tax withholding payable 435.2 OASDi taxes payable 67.456 Medicare taxes payable 15.776 United way payable 11 Salaries payable 558.57 ans 3 Salaries payable 558.57 Cash 558.57 If any doubt please comment. If satisfied you can rate

Related Questions

Navigate

• Browse (All)
• Browse H
• Subjects

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.