Karl,an Employee of Smith Electric,Inc

question 29

Essay

Karl,an employee of Smith Electric,Inc. ,has gross salary for March of $4,000.The entire amount is under the OASDI limit of $117,000 and thus subject to FICA.He is also subject to federal income tax at a rate of 18%.Karl has a deduction of $320 for health insurance and $80 for United Way.Provide the journal entry to record salaries expense and payroll withholdings.(Assume a FICA-OASDI Tax of 6.2% and FICA-Medicare Tax of 1.45%. )

---

Definitions:

Profit and Loss

A financial statement that summarizes revenues, costs, and expenses incurred during a specific period, usually a fiscal quarter or year.

New Partnership

A business arrangement where two or more individuals or entities agree to share the profits and losses of a newly formed business venture.

Contribution

In financial contexts, it refers to the amount an individual or entity contributes towards savings, investments, or the capital of a company.