Answer:
(a) Debit Wages expense for $950; Credit Federal income tax withholding for $94; and Credit Wages payable for $856
(b) Debit wages payable for $856; and Credit Cash for $856.
Explanation:
The entries will look as follows:
a) Prepare the journal entries to record Elize’s pay for the period
<u>Date Account title Dr ($) Cr ($) </u>
Jan 15 Wages expense (w.3) 950
Federal income tax withholding 94
Wages payable (w.4) 856
<em><u> (To Elize’s pay for the period.) </u></em>
(b) Prepare the journal entry to record the payment of Elize’s wages.
<u>Date Account title Dr ($) Cr ($) </u>
Jan 15 Wages payable (w.4) 856
Cash 856
<u><em> (To record the payment of Elize’s wages.) </em></u>
Workings:
Normal hours = 40
Number of hours worked = 45
Overtime hours = Number or hours worked - Normal hours = 45 - 40 = 5
Normal hourly wage rate = $20
Overtime hourly rate = $30
Federal income tax withholding = $94
w.1: Normal wage amount = Normal hours * Normal wage rate = 40 * $20 = $800
w.2: Overtime pay = Overtime hours * Overtime hourly rate = 5 * $30 = $150
w.3: Wages expense = Normal wage amount + Overtime pay = $800 + $150 = $950
w.4: Wages payable = Total wage amount - Federal income tax withholding = $950 - $94 = $856
