Question

Hubert works for MRK all year and earns a monthly salary of $ 11,900. There is no overtime pay. Brooke​'s income tax withholding rate is 10 % of gross pay. In addition to payroll​ taxes, Brooke elects to contribute 5 % monthly to United Way. MRK also deducts $ 125 monthly for​ co-payment of the health insurance premium. As of September​ 30, Brooke had $ 107,100 of cumulative earnings.

Requirements
1. Compute Brooke​'s net pay for October.
2. Journalize the accrual of salaries expense and the payments related to the employment of Brooke Hubert.

Answer 1

monthly salary $11,900

income tax withholding 10%

United Way contribution 5%

health insurance $125

cumulative earnings until September 30 = $107,100

Brooke's net pay for October:

Gross pay $11,900

federal income tax withholding -$1,190

United Way contribution -$595

Social Security -$737.80

Medicare -$172.55

health insurance -$125

net pay = $9,079.65

October 31, 202x, wages and payroll taxes expense

Dr Wages expense

Dr FICA tax (OASDI) expense

Dr FICA tax (Medicare) expense

Cr Federal income tax withholding payable 1,190

Cr United Way contribution payable 595

Cr FICA tax (OASDI) withholding payable 737.80

Cr FICA tax (OASDI) payable 737.80

Cr FICA tax (Medicare) withholding payable 172.55

Cr FICA tax (Medicare) payable 172.55

Cr Health insurance 125

Cr Wages payable 9,079.65

No FUTA or SUTA tax expense because they only apply for the first $7,000 earned per year. Since we are not told if the employer also pays a % of the health insurance, then we cannot calculate it, nor any 401k contribution.