Gross Earnings: It is the amount of employee’s total earnings during a period. It includes fixed wage or salary plus overtime pay or any bonus or commission if applicable. Net Pay: It is the amount an employee actually receives as the salary or wage payment for a particular period. It is calculated after all the statutory and voluntary deductions by the employer. Federal Insurance Contributions Act (FICA) Tax: It is a tax applicable on employees’ earnings as a certain percentage. Employers are also supposed to contribute their share and deposit the combined amount to the federal body. Payroll Accounting: The process of payroll accounting includes the computation and payment of earnings of the employees and the payroll taxes to be paid to state and federal authorities as per applicable laws. Journal Entries: Entries to record the financial transactions during each accounting period are called journal entries. Income, liabilities and the giver are credited if the balance is increased and debited if the balance is reduced Expenses, assets and the receiver are debited if the balance is increased and credited if the balance is reduced in a journal entry . To compute: The net pay for January.

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Chapter 11, Problem 3aDIE

(a)

To determine

Gross Earnings: It is the amount of employee’s total earnings during a period. It includes fixed wage or salary plus overtime pay or any bonus or commission if applicable.

Net Pay: It is the amount an employee actually receives as the salary or wage payment for a particular period. It is calculated after all the statutory and voluntary deductions by the employer.

Federal Insurance Contributions Act (FICA) Tax: It is a tax applicable on employees’ earnings as a certain percentage. Employers are also supposed to contribute their share and deposit the combined amount to the federal body.

Payroll Accounting: The process of payroll accounting includes the computation and payment of earnings of the employees and the payroll taxes to be paid to state and federal authorities as per applicable laws.

Journal Entries: Entries to record the financial transactions during each accounting period are called journal entries. Income, liabilities and the giver are credited if the balance is increased and debited if the balance is reduced Expenses, assets and the receiver are debited if the balance is increased and credited if the balance is reduced in a journal entry.

To compute: The net pay for January.

(b).

To determine

To record: The payroll for January.

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