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Gross Pay and Deductions

O'Connor works as a cook for a Steak 'n Shake diner. His straight-time pay is $10 per hour, with time and a half for hours in excess of 40 hours a week. O'Connor's payroll deductions include withheld income tax of 7% of total earnings, FICA tax of 8% of total earnings, and a weekly deduction of $5 for a charitable contribution to United Fund.

Assuming O'Conner worked 50 hours during the week, (a) compute his gross pay and net pay for the week and (b) make a general journal entry to record the store's wage expense for O'Conner's work, including payroll deductions. Explanations are not required.

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The total hours worked is 50. It is regular 40 and 10 overtime. Regular rate is $10 per hour and overtime rate is $15 per hour. The gross pay is ...

Solution Summary

The solution explains the calculation of gross pay with overtime and the related journal entry with deductions for FICA taxes and charitable contribution