Karim Enterprises has two hourly employees, Kala and Carl. Both employees earn overtime at the rate of 1½ times the hourly rate for hours worked in excess of 40 per week. Assume the Social Security tax rate is 6 percent on the first $110,000 of wages and the Medicare tax rate is 1.5 percent on all earnings. Federal income tax withheld for Kala and Carl was $250 and $220 respectively. The following information is for the first week in January 2010: Employee Kala Carl Hours Worked 52 47 Wage Rate per Hour $20 $25 Required a. Calculate the gross pay for each employee for the week. b. Calculate the net pay for each employee for the week. c. Prepare the general journal entry to record payment of the wages.

Karim Enterprises has two hourly employees, Kala and Carl. Both employees earn overtime at the rate of 1½ times the hourly rate for hours worked in excess of 40 per week. Assume the Social Security tax rate is 6 percent on the first $110,000 of wages and the Medicare tax rate is 1.5 percent on all earnings. Federal income tax withheld for Kala and Carl was $250 and $220 respectively. The following information is for the first week in January 2010: Employee Kala Carl Hours Worked 52 47 Wage Rate per Hour $20 $25 Required a. Calculate the gross pay for each employee for the week. b. Calculate the net pay for each employee for the week. c. Prepare the general journal entry to record payment of the wages.

College Accounting (Book Only): A Career Approach

12th Edition

ISBN:9781305084087

Author:Cathy J. Scott

Publisher:Cathy J. Scott

Chapter8: Employer Taxes, Payments, And Reports

Section: Chapter Questions

Problem 4E

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