Question

Dixon Sales has four sales employees that receive weekly paychecks. Each earns $13 per hour and each has worked 40 hours in the pay period. Each employee pays 12% of gross in federal income tax, 3% in state income tax, 6.0% of gross in social security tax, 1.5% of gross in Medicare tax, and 0.5% in state disability insurance.
Required:
Journalize the recognition of the pay period ending January 19 that will be paid to the employees January 26.

Answer 1

Answer:

Jan. 19

Dr Sales Wages Expense $ 3,640.00

Cr Federal Income Tax Payable $ 436.80

Cr State Income Tax Payable $ 109.20

Cr Social Security Tax Payable $ 218.40

Cr Medicare Tax Payable $ 54.60

Cr State Disability Insurance $ 18.20

Cr Sales Wages Payable $ 2,802.80

Explanation:

Preparation of the journal for recognition of the pay period ending January 19 that will be paid to the employees January 26.

Jan. 19

Dr Sales Wages Expense $ 3,640.00 (7 *40 *13)

Cr Federal Income Tax Payable $ 436.80 (3,640 * 12%)

Cr State Income Tax Payable $ 109.20 (3,640 * 3%)

Cr Social Security Tax Payable $ 218.40 (3,640 * 6%)

Cr Medicare Tax Payable $ 54.60 (3,640* 1.5%)

Cr State Disability Insurance $ 18.20 (3,640 *0.5%)

Cr Sales Wages Payable $ 2,802.80

($3,640.00-$436.80-$109.20-$218.40-$54.60-$18.20)