Current Liabilities and Payroll Accounting

Maria Garza's regular hourly wage rate is $16, and she receives a wage of 1 1/2 times the regular hourly rate for work in excess of 40 hours. During a March weekly pay period, Maria worked 42 hours. Her gross earnings prior to the current week were $6,000. Maria is married and claims three withholding allowances. Her only voluntary deduction is for group hospitalization insurance at $25 per week

Instructions

1. Compute the following amounts for Maria's wages for the current week.
   
   1. Gross earnings.
   2. FICA taxes. (Assume a 7.65% rate on maximum of $117,000.)
   3. Federal income taxes withheld. (Use the withholding table)
   4. State income taxes withheld. (Assume a 2.0% rate.)
   5. Net Pay
2. Record Maria's Pay.

Solution