Answer:
1. Compute Brooke's net pay for October
Brooke's gross monthly salary = $11,900
- federal income taxes withholdings = ($1,190)
- contribution to United Way = ($595)
- health insurance = ($125)
- social security = 6.2% x $11,900 = ($737.80)
- medicare = 1.45% x $11,900 = ($172.55)
net pay = $9,079.65
2. Journalize the accrual of salaries expense and the payments related to the employment of Brooke Hubert.
We must include here FUTA taxes paid by the employer. In this case, since we are not given the state unemployment (SUTA) tax rate, we can only calculate the federal unemployment tax 6% x $11,900 = $714. Both the employee and employer pays FICA taxes in an equal amount. The amount that is withheld from the employee's paycheck is identified as FICA tax withholding.
October 31, 202x
Dr Wages expense 11,900
Dr FICA taxes expense 910.35
Dr FUTA taxes expense 714
Cr Federal income tax withholding payable 1,190
Cr FICA tax (social security) withholding payable 737.80
Cr FICA tax (social security) payable 737.80
Cr FICA tax (medicare) withholding payable 172.55
Cr FICA tax (medicare) payable 172.55
Cr FUTA tax payable 714
Cr Health insurance payable 125
Cr United Way payable 595
Cr Wages payable 9,079.65
