Dixon Sales has five sales employees which receive weekly paychecks. Each earns

Question

Dixon Sales has five sales employees which receive weekly paychecks. Each earns $10.25 per hour and each has worked 40 hours in the pay period. Each employee pays 12% of gross in Federal Income Tax, 3% of gross in State Income Tax, 6% of gross in Social Security Tax, 1.5% of gross in Medicare Tax, and 1/2% in State Disability Insurance. Journalize the recognition of the pay period ending January 19th which will be paid to the employees January 26th. (Keep in mind that none of the employees is subject to a ceiling amount for social security.)

Explanation / Answer

Debit credit Accured salery.......................................410 Revenue........................................................................410 Federal income tax expense.....................49.2 Cash...........................................................................49.2 state income tax expense.......................12.3 cash...........................................................................12.3 society security tax expense...................24.6 cash...........................................................................24.6 medicare tax expense...........................6.15 cash..........................................................................6.15 state disability insurance expense...........2.05 cash.........................................................................2.05

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