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# Accounting questions

E2-17

Instructions:

a) Fill in the missing amounts
b) Journalize the February paroll and the payment of the payroll.

#### Solution Preview

1. Since FICA taxes are 8% of the gross earnings. The equation for calculation of FICA tax would be
Gross Earnings X 8% = FICA Tax
Given that FICA Tax is \$800, we get the gross earnings to be
Gross Earnings = 800/0.08= \$10,000 ( Answer 2 )
Regular Earnings are \$8,900, therefore overtime is 10000-8900=\$1,100 ( Answer 1)
State Income Taxes are 3% of gross earnings, are 10000 X 3% = \$300 ( Answer 3)
Total Deductions are 800+1140+300+100 = \$2340 ( Answer 4)
Total Earnings are \$10,000, Store Wages are \$4,000, therefore Warehouse Wages are 10000-4000=\$6,000 ( Answer 5)
2. The journal entry would be
Dr Cr
Warehouse Wages 6,000
Store Wages 4,000
FICA Taxes Payable 800
Federal Income Taxes Payable ...

#### Solution Summary

The solution has two accounting questions relating to missing amounts in payroll and current liabilities

\$2.19