Chapter 11, Problem E11.18E

To determine

Computation of Employee’s Gross and Net Pay:

TheGross pay of employees is a wages computed as per hourly, monthly or yearly package fixed for the respective employee. However, the Net pay is the amount left over after deducting the Withholding deductions from the employee gross pay. It is basically the net amount received by the employee on the pay date. Withholding deductions may be compulsory deductions such as Income tax withholdings, FICA withholdings, etc or it may be voluntary contributions made by the employee and instruct the employer to deduct it from the pay check.

Requirement:

The Gross pay and net pay of the employee, Hubert Sollanberger.

To determine

Requirement2

The Journal entry for recording the pay expense accrual.

To determine

Requirement3

The Journal entry for the payment of net wages expense.