Following are some transactions and events of Business Solut

Following are some transactions and events of Business Solutions.
  

Required:
1. Assume that Lyn Addie is an unmarried employee. Her $1,120 of wages are subject to no deductions other than FICA Social Security taxes, FICA Medicare taxes, and federal income taxes. Her federal income taxes for this pay period total $112. Compute her net pay for the eight days\' work paid on February 26. (Round your answer to 2 decimal places. Do not round intermediate calculations.)

2. Record the journal entry to reflect the payroll payment to Lyn Addie as computed in part 1. (Round your answers to 2 decimal places. Do not round intermediate calculations.)

Journal entry worksheet

Record the payroll expenses and liabilities for the eight days’ work paid on February 26.

Note: Enter debits before credits.

3. Record the journal entry to reflect the (employer) payroll tax expenses for the February 26 payroll payment. Assume Lyn Addie has not met earnings limits for FUTA and SUTA (the FUTA rate is 0.6% and the SUTA rate is 4% for the company. (Round your answers to 2 decimal places. Do not round intermediate calculations.)

Journal entry worksheet

Record the employer’s payroll expenses and liabilities for the eight days’ work paid on February 26.

Note: Enter debits before credits.

4. Record the entries for the merchandise sold on March 25 if a 4% sales tax rate applies. (Round your answers to the nearest whole dollar.)

Journal entry worksheet

Record the sales revenue of $2,870 on account to Wildcat Services together with 4% sales tax on every dollar of merchandise sold.

Note: Enter debits before credits.

Journal entry worksheet

Record the cost of goods sold of $2,002.

Note: Enter debits before credits.

Solution

1) Net pay = Gross pay - Federal income taxes withheld - FICA Social Security taxes - FICA Medicare taxes = 1120 - 112 - (1120*6.2%) - (1120*1.45%) = 1120 - 112 - 69.44 - 16.24 = $922.33

2) Journal entry of Payroll payment :

3) Journal entry of Payroll expenses :

4) Journal Entries: