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Chapter 11: 6SE (page 578)

Lucy Rose works at College of Fort Worth and is paid $12 per hour for a 40-hour workweek and time-and-a-half for hours above 40.

Requirements

1. Compute Rose’s gross pay for working 60 hours during the first week of February.

2. Rose is single, and her income tax withholding is 15% of total pay. Rose’s only payroll deductions are payroll taxes. Compute Rose’s net (take-home) pay for the week. Assume Rose’s earnings to date are less than the OASDI limit.

3. Journalize the accrual of wages expense and the payment related to the employment of Lucy Rose.

Short Answer

Expert verified
  1. Gross pay = $720
  2. Net pay = $612

3. Salaries and wages will be debited with $720.

Step by step solution

01

Gross pay

Rose’s gross pay for working 60 hours during the first week of

February;

Gross Pay= Total working Hours× Rate per Hour=$60×$12=$720

02

Income tax

Withholding Amount= Total amount × 15100=$720×15100= $108

Rose’s net (take-home) pay for the week;

03

Journal Entries

Date

Particulars

Debit

Credit

1st week of Feb

Salaries and wages expense

$720

Tax Payable

$108

Cash

$612

(To record salaries and wages expense and payroll withholdings.)

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Most popular questions from this chapter

Rios Raft Company had the following liabilities.

a. Accounts Payable

b. Note Payable due in 3 years

c. Salaries Payable

d. Note Payable due in 6 months

e. Sales Tax Payable

f. Unearned Revenue due in 8 months

g. Income Tax Payable

Determine whether each liability would be considered a current liability (CL) or a long-term liability (LTL).

Erin O’Neil Associates reported short-term notes payable and salaries payable as follows:

2018

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During 2018, O’Neil paid off both current liabilities that were left over from 2017, borrowed cash on short-term notes payable, and accrued salaries expense. Journalize all four of these transactions for O’Neil during 2018. Assume no interest on short-term notes payable of $16,000.

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