Question

Parry Paint LLC started operations on January 1, 2019. It had the following payroll transactions during the year.

Jan 15 – Paid an employee B. Vaughn $1,560 cash for January 1-15 salary, calculated as follows:

Gross Pay	Deductions
	Income taxes 15%	FICA Social Security 6.2%	FICA Medicare 1.45%	Total deductions	Net Pay
$2,000

The company matches FICA deductions.

Required:

1. Calculate B. Vaughn’s net pay and journalize the entries to record her payroll.
2. Prepare journal entries to record the above transactions. Show necessary calculations.

Answer 1

Gross Pay	Deductions
	Income taxes	FICA Social Security	FICA Medicare	Total deductions	Net Pay
		6.20%	1.45%
2000	287	124	29	440	1560
The company matches FICA deductions.
Required:
Calculate B. Vaughn’s net pay and journalize the entries to record her payroll.
Prepare journal entries to record the above transactions. Show necessary calculations.
Date	Account Names	Debit	Credit
	Salary Expense	$ 2,000.00
	FICA Taxes Payable (124+29)		$     153.00
	Federal Income Tax Payable		$     287.00
	Salaries Payable		$ 1,560.00
	Salaries Payable	$ 1,560.00
	Cash		$ 1,560.00
	Fica Tax Expenses	153
	FICA Taxes Payable (124+29)		153
	To record employer contributions