An Employee Receives an Hourly Rate of $15,with Time and a Half

question 54

Essay

An employee receives an hourly rate of $15,with time and a half for all hours worked in excess of 40 during the week.Payroll data for the current week are as follows: hours worked,46; federal income tax withheld,$120; cumulative earnings for the year prior to this week,$5,500; Social security tax rate,6%; and Medicare tax rate,1.5%; state unemployment compensation tax,3.4% on the first $7,000; federal unemployment compensation tax,0.8% on the first $7,000.Prepare the journal entries to record the salaries expense and the employer payroll tax expense.

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Definitions:

Accrued Interest

Interest that has been earned but not yet received or recorded as income by the end of the accounting period.

Tax Rate

The percentage at which an individual or corporation is taxed, varying by income level, jurisdiction, and type of tax.

Intragroup Sales

Sales that occur between entities within the same group, which must be eliminated in the preparation of consolidated financial statements to avoid overstating revenue.