Ashley Robertson works for MRK all year and earns a monthly salary of $ 11,900. There is no overtime pay. Ashley's income tax withholding rate is 20 % of gross pay. In addition to payroll taxes, Ashley elects to contribute 2% monthly to United Way. MRK also deducts $ 125 monthly for co-payment of the health insurance premium. As of September 30, Ashley had $ 107,100 of cumulative earnings.
Required:
1. Compute Ashley's net pay for October. (Round all amounts to the nearest cent.) Withholding deductions: Net (take-home) pay
2. Journalize the accrual of salaries expense and the payment related to the employment of Ashley Robertson.

1. Compute Ashley's net pay for October.

Ashley's net pay = $11,900 - $2,380 - $238 - $125 - $737.80 - $172.55 = $8,246.65

2. Journalize the accrual of salaries expense and the payment related to the employment of Ashley Robertson.

Dr Wages expense 11,900

Dr FICA expense 910.35

    Cr Federal income tax withholding payable 2,380

    Cr United Way contribution payable 238

    Cr Health insurance payable 125

    Cr FICA Social Security withholding payable 737.80

    Cr FICA Medicare withholding payable 172.55

    Cr FICA Social Security tax payable 737.80

    Cr FICA Medicare tax payable 172.55

    Cr Wages payable 8,246.65

Dr Federal income tax withholding payable 2,380

Dr United Way contribution payable 238

Dr Health insurance payable 125

Dr FICA Social Security withholding payable 737.80

Dr FICA Medicare withholding payable 172.55

Dr FICA Social Security tax payable 737.80

Dr FICA Medicare tax payable 172.55

Dr Wages payable 8,246.65

    Cr Cash 12,810.35

Explanation:

monthly salary $11,900

income tax withholding rate 20% = $11,900 x 20% = $2,380

union contribution 2% = $11,900 x 2% = $238

health insurance $125

cumulative earnings September 30, $107,100

FICA taxes:

social security 6.2% = $737.80

Medicare 1.45% = $172.55

no FUTA tax applies

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