Question

Dixon Sales has four sales employees that receive weekly paychecks. Each earns $14 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. Refer to the Chart of Accounts for exact wording of account titles. Round your answers to two decimal places.

Answer 1

Answer:

The journal would be as follows:

                                         Debit Credit

sales wages expenses $2,240.00  

Federal income tax payable   $268.80

State income tax payable                   $67.20

Social security tax payable                    $134.40

Medicare tax payable                       $33.60

State disability insurance payable   $11.20

Sales Wages payable                   $1,724.80

Explanation:

In order to make the journal entry of the recognition of the pay period ending January 19 that will be paid to the employees January 26 we would have to calculate the records as follows:

sales wages expenses=4 * $14 * 40 hours=$2,240.00  

Federal income tax payable= 2,240* 12%=$268.80

State income tax payable= 2,240 * 3%=$67.20

Social security tax payable= 2240 * 6%=$134.40

Medicare tax payable=2240 * 1.5%=$33.60

State disability insurance payable=2240 * 0.5%=$11.20

Sales Wages payable=$1,724.80

Therefore the journal would be as follows:

                                         Debit Credit

sales wages expenses $2,240.00  

Federal income tax payable   $268.80

State income tax payable                   $67.20

Social security tax payable                    $134.40

Medicare tax payable                       $33.60

State disability insurance payable   $11.20

Sales Wages payable                   $1,724.80