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uranmaximum [27]
3 years ago
11

Elize’s regular hourly wage rate is $20, and she receives an hourly rate of $30 for work in excess of 40 hours. During a January

pay period, Elize works 45 hours. Elize’s federal income tax withholding is $94, and she has no voluntary deductions. Use January 15 for the end of the pay period and the payment date. Prepare the journal entries to record (a) Elize’s pay for the period and (b) the payment of Elize’s wages.
Business
1 answer:
saveliy_v [14]3 years ago
3 0

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

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You are planning to save for retirement over the next 25 years. To do this, you will invest $700 per month in a stock account an
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withdraw each month from account for 20 year withdrawal period

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we will apply here future value formula that is

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here P is principal amount i.e $700 given and r is are and t is time

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so

monthly withdrawal from combined account is

amount = \frac{Pv}{\frac{1- \frac{1}{(1+r)^t}}{r} }      ...............2

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Answer:

b. $20.82

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I = B*m\\I = \$1250 *1.666\%\\I=\$20.82

The answer is b. $20.82

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