Answer and Explanation:
1. The gross pay is
Straight time pay
= 40 hours × $30 per hour
= $1,200
overtime pay
= 40 hours × $30 per hour × 1.5
= $1,800
So, the total gross pay is
= $1,200 + $1,800
= $3,000
2. Now the net take home pay is
Gross pay $3,000
Less: deductions
Income tax withholding (20%) -$600
Employee OASDI tax (6.2%) -$186
Employee medicare tax (1.45%) -$43.50
Net take home pay $2,170.50
3. Now the journal entries are
Wages expense $3,000
To Income tax payable $600
To Employee OASDI tax payable $186
To Employee medicare tax payable $43.50
To wages payable $2,170.50
(Being the wages expense is recorded)
We debited the expenses as it increased the expenses and credited all liabilities it increased the liabilities
Wages payable Dr $2,170.50
To cash $2,170.50
(being cash paid is recorded)
For recording this we debited the wages payable as it reduced the liabilities and credited the cash as it also reduced the current assets
