Jackson-Rogers Inc. has the following information for their payroll Jose Rodrigu

Question

Jackson-Rogers Inc. has the following information for their payroll

Jose Rodriguez, Married with 4 withholding allowances on W-4, hourly wage rate $10/hr. Overtime rate of 1.5 x wage rate for every hour over 40 hours per week. SSN: 123-45-6789

Maria Gonzales, Single with 2 withholding allowances on W-4, hourly wage rate of $15/hour. Overtime rate of 1.5 x wage rate for every hour over 40 hours per week. SSN: 987-65-4321

Bill White, single with 0 withholding allowances dependent on W-4, hour hourly wage rate of $15/hour. Overtime rate of 1.5 x wage rate for every hour over 40 hours per week. SSN: 123-12-1234

Required:

For the week ended 11/6/2015, Jose worked 46 hours, Maria worked 42 hours and Bill worked 20 hours. Jackson-Rogers pays wages and salaries weekly.

Calculate all taxes and the total paycheck for each of the 3 employees. Google IRS Circular E to find the table. Also, none of the employees YTD has exceeded the Social Security threshold.

Journalize the transactions

Assume, Jose has voluntary deductions of $120 towards his health insurance, that he wants the company to withhold and remit that payment to his insurance company. What would be his check amount and journalize those transactions.

I was able to calculate the taxes and total paycheck for each of the employees, but how would i journalize the transactions?

Explanation / Answer

Here, Journal entry would be like first you pay your company from your salary for health insurance and the same health insurace amount you utilise to pay insurance premium.

First Journal entry:

Health insurance deductions A/c Dr - $120

To Salary received A/c $120

Second Journal entry would be:

Insurance premium A/c Dr - $120

To Health insurance deductions A/c $ 120.

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