Chapter 11, Problem S11.7SE

To determine

Employee’s pay: The gross pay is the total earning of a period that an employee has earned. The hourly rate of pay is multiplied by the number of hours the employee has worked to determine the gross pay. Out of this gross pay, several withholdings are done with respect to various purposes like for Income tax, social security taxes, medicare taxes, etc. The gross pay net of the withholdings determines the take home pay of the employee.

To determine:

Net pay of Lily Carter

Given:

$Gross Salary = \$12100$

$Income Tax withholding @ 10\% = 12100*10\% = \$1210$

$Monthly contribution to United Way = 12100*5\% = \$605$

$Health Insurance Premium = \$250$

$Social Security taxes @ 6.2\% = \$750.20$

$Medicare Taxes @ 1.45\% = \$175.45$

To determine

Journal Entry to record wages expense and payment.