Question

Use the following information to answer the next three questions:

During the first pay period of 2019, Ashley had earned a total of $2k from working at Cooper Consulting, LLC. Ashley elected to have $200 withheld for federal income taxes, $50 for state income taxes and 7.65% for FICA taxes were applied to the first $139k of earnings. State and federal unemployment taxes for the period are $100 and $125, respectively.

1. What was Ashley’s Net Pay for the pay period? Please label each line item in the calculation of net pay

Provide answer towards the bottom of the answer sheet

2. What journal entry would Cooper Consulting, LLC. record for Wage Expense for the pay period?

Provide answer towards the bottom of the answer sheet

3. What journal entry would Cooper Consulting, LLC. record for Payroll Tax Expense for the pay period?

Answer 1

Requirement 1:-

Ashley's Net Pay for the period can be calculated as follows :-

Employee	Cumulative earnings before weekly payroll	Gross Pay for the pay period	Federal Income Taxes	State Income tax	FICA Tax	State Unemployment tax	Federal Unemployment Taxes	Net Pay
		A			A * 7.65%
Ashley	2,000	2,000	200	50	153	100	125	1,372

Requirement 2:-

The Wage expense journal entry for the pay period can be recorded as follows :-

Journal Entry
	Wages Expense A/c Dr	2,000
	To Wages Expense Payable A/c		2,000
	(to record the wages expenses payable for the pay period)

Requirement 3:-

The Payroll Tax expense Journal Entry can be recorded as follows :-

Journal Entry
	Wages Expense Payable A/c Dr	2,000
	To Federal Income Tax a/c		200
	To State Income Tax a/c		50
	To FICA Tax a/c		153
	To State Unemployment tax		100
	To Federal Unemployment tax		125
	To Bank A/c		1,372
	(to record the payroll expense for Ashley)