Question

3. Joy Lee’s regular hourly wage rate is $15, and she receives a wage of 2 times the regular hourly rate for work in excess of 40 hours. During a June weekly pay period, Joy worked 50 hours. Joy’s federal income tax withholding is $90 and state income tax is $25 and FICA is 8%. Her only voluntary deduction is for retirement savings at $30 per week. Compute the following amounts for Joy’s wages for the current week.

1. Gross earnings

2. FICA taxes

3. Net Pay

4. Prepare the journal entry for Joy’s pay.

#	Account Titles and Explanation	Ref	Debit	Credit

Answer 1

	Particulars	Amount
	Normal pay [40 hours × $15]	$         600.00
	Overtime pay [10 hours × $15 × 2]	$         300.00
1	Gross earnings	$         900.00
	× FICA rate	8%
2	FICA taxes	$            72.00
	Deductions
	Federal income tax	$            90.00
	State income tax	$            25.00
	FICA tax	$            72.00
	Retirement saving	$            30.00
	Total deductions	$         217.00
	Gross pay	$         900.00
	Less: deductions	$         217.00
3	Net pay	$         683.00
4	Account	Debit	Credit
	Wages expense	$         900.00
	FICA taxes payable		$                 72
	Federal income tax payable		$                 90
	State income tax payable		$                 25
	Retirement savings payable		$                 30
	Wages payable		$               683
	(Entry to reocrd wages)

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