Betsy Strand’s regular hourly wage rate is $32, and she receives an hourly rate

Question

Betsy Strand’s regular hourly wage rate is $32, and she receives an hourly rate of $48 for work in excess of 40 hours. During a January pay period, Betsy works 47 hours. Betsy’s federal income tax withholding is $94, and she has no voluntary deductions. Assume that the FICA tax rate is 7.65%. Prepare the employer’s journal entries to record (a) Betsy’s pay for the period and (b) the payment of Betsy’s wages. Use January 15 for the end of the pay period and the payment date. (Round answers to 2 decimal places, e.g. 15.25. Credit account titles are automatically indented when amount is entered. Do not indent manually.) No. Date Account Titles and Explanation Debit Credit (a) Jan. 15 (b) Jan. 15

Explanation / Answer

Jan-15 Salaries and Wages expense 1616 =(40*32)+(7*48)         FICA taxes payable 123.62 =1616*7.65%         Federal income tax payable 94         Salaries and Wages payable 1398.38 Jan-15 Salaries and Wages payable 1398.38         Cash 1398.38

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