North Florida https//newconnect mheducat connect.htm apters 9-11 Help Seve Follo

ID: 2583119 • Letter: N

Question

North Florida https//newconnect mheducat connect.htm apters 9-11 Help Seve Following are some transactions and events of Business Solutions feb. 26 The company paid cash to Lyn Addie for eight days' work at $135 per day Har, 25 The company sold merchandise witha $2,132 cost for $2,8s0 an credit to Wildcat Services, invoice dated Parch 2s. Required: 1. Assume that Lyn Addie is an unmarried employee Her $1.080 of wages are subject to no deductions otfher than FICA Social Security taxes, FICA Medicare taxes, and federal income taxes. Her federal income taxes for this pay period total $108 Compute her net pay for the eight days' wosk 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 Addie as computed in part 1 (Round your answers to 2 decimal places. Do not round intermediate colculations Journal entry worksheet 10, 3111 Net F10 3 5 6 7 8 9

Explanation / Answer

Here FICA tax includes social security tax (6.2%) and Medicare (1.45%). In total it is 7.65%

Gross pay = $135 per day × 8 days = $1,080

Social security tax = Gross pay × 6.2% = $1,080 × 6.2% = $66.96

Medicare tax = Gross pay × 1.45% = $1,080 × 1.45% = $15.66

Withholding income tax = $108

Net pay = Gross pay – Social security tax – Medicare tax – Withholding income tax

= 1,080 – 66.96 – 15.66 – 108

= $889.38 (Answer)

Journal of employee payroll

Date

Accounts titles and explanations

P.ref

Debit $

Credit $

Feb. 26

Salaries wages expense (Gross)

1,080

Withholding income tax

108

Social security tax payable

66.96

Medicare tax payable

15.66

Salaries and wages payable (Net)

889.38

To record salaries and wages liability to be paid after the necessary deductions