JournaldrillRecording payroll
A journal entry exercise from Journaldrill. Solve it with an account picker and debit and credit fields in your browser, and it is checked the moment you submit.
The task
Northgate Print Shop's gross wages for the period are $48,000. Withholdings are federal income tax of $6,240, Social Security tax at 6.2% and Medicare tax at 1.45%. No employee has reached any earnings limit. Record the payroll; wages will be paid later.
What this exercise teaches
Social Security is $48,000 x 6.2% = $2,976 and Medicare is $48,000 x 1.45% = $696. Net pay is $48,000 - $6,240 - $2,976 - $696 = $38,088.
A hint if you get stuck
Expense the gross wages, set up a liability for each amount withheld, and owe employees the remainder.
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