Nate McCall works for The Prescott Company. For the pay period ended Nov 30, his

Question

Nate McCall works for The Prescott Company. For the pay period ended Nov 30, his gross earnings are $3,000. McCall has $800 deducted for federal income taxes and $200 for state income taxes from each paycheck. Additionally, a $35 premium for his health care insurance and $10 donation for the United Way are deducted. McCall pays FICA Social Security taxes at a rate of 6.2% and FICA Medicare taxes at a rate of 1.45%. He has not earned enough this year to be exempt from any FICA taxes. Journalize the accrual of salaries expense of McCall’s wages. Round all calculations to the nearest whole dollar.

Explanation / Answer

Answer

Journalize the accrual of salaries expense of McCall’s wages.  

Salary Expense A/c Dr. $3,000

            To Federal income tax A/c Cr. $ 800

           To State income tax A/c Cr. $ 200

          To Health care insurance A/c Cr. $35

           To Donation A/c Cr. $10

           To FICA Social Security taxes A/c Cr. $ 186    (3000*6.2%)

          To FICA Medicare taxes A/c Cr. $ 43.5           (3000*1.45%)

         To Cash A/c Cr. $ 1725.5

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