Cindy Neuer\'s regular hourly wage rate is $17, and she receives an hourly rate

Question

Cindy Neuer's regular hourly wage rate is $17, and she receives an hourly rate of $22 for work in excess of 40 hours. During a January pay period, Cindy works 49 hours. Cindy's federal income tax withholding is $97, and she has no voluntary deductions. Prepare the journal entries to record (a) Cindy's pay for the period and (b) the payment of Cindy's wages. Use January 15 for the end of the pay period and the payment date. (For multiple debit/credit entries, list amounts from largest to smallest eg 10, 5, 3, 2.

Explanation / Answer

Regular wages = 40 hrs * $17 = $680 Overtime = 9hrs * $22 = $198 Gross pay = $878 Net pay = Gross pay – withholding tax = $878 - $97 = $781 Journal: Debit Wages a/c $878 Credit bank a/c $781 Credit withholding tax payable a/c $97 FICA = 8% of $878 = $70.24 Net pay = $878 - $70.24 = $807.76 Refund = $97 - $70.24 = $26.76

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