Here is my question am I suppose to make journal entry. Cindy Lou makes $30,000 per year as an exempt employee. She worked 15 hours of overtime in the month of September. Payday for wages earned in the month of Septemberis October 7? Ignoring Federal and state income tax withholding, how much would she receive for September net of social security and medicare taxes? What journal entry would be made on September 30 for wages owed to Cindy? What journal entry would be made when she is paid on October 7

To calculate how much Cindy Lou would receive for September net of Social Security and Medicare taxes, we first need to determine the amount of overtime pay she is entitled to.

Cindy Lou worked 15 hours of overtime in September. The overtime pay rate is usually calculated at 1.5 times the regular wage rate. Since Cindy Lou earns $30,000 per year, her regular wage rate can be calculated by dividing her annual salary by the number of workdays in a year. Let's assume there are 52 weeks in a year, and Cindy Lou works 5 days a week, so the total number of workdays in a year would be 52 x 5 = 260 days.

Therefore, her regular wage rate per day would be $30,000 / 260 = $115.38.

To calculate the overtime pay, we multiply the regular wage rate by the overtime factor of 1.5: $115.38 x 1.5 = $173.08.

Next, we need to calculate the total gross wages for September. Since Cindy Lou worked 15 hours of overtime, we also need to add the overtime pay to her regular monthly salary. Assuming there are 30 days in September:

Regular salary = $30,000 / 12 = $2,500 per month
Overtime pay = $173.08 x 15 hours = $2,596.20
Total gross wages = Regular salary + Overtime pay = $2,500 + $2,596.20 = $5,096.20

Now, let's calculate the Social Security and Medicare taxes. For 2021, the Social Security tax rate is 6.2%, and the Medicare tax rate is 1.45%. These rates are applied to the total gross wages.

Social Security tax = $5,096.20 x 6.2% = $315.34
Medicare tax = $5,096.20 x 1.45% = $73.92

To calculate the net wages for September, we subtract the Social Security and Medicare taxes from the total gross wages.

Net wages = Total gross wages - Social Security tax - Medicare tax = $5,096.20 - $315.34 - $73.92 = $4,706.94

Therefore, Cindy Lou would receive $4,706.94 for September net of Social Security and Medicare taxes.

Now, let's move on to the journal entries.

1. Journal entry on September 30 for wages owed to Cindy:
Debit - Wage Expense: $4,706.94
Credit - Accrued Wages Payable: $4,706.94

This entry recognizes the wages expense for September and the corresponding liability for unpaid wages at the end of the month.

2. Journal entry when Cindy is paid on October 7:
Debit - Accrued Wages Payable: $4,706.94
Credit - Cash: $4,706.94

This entry removes the liability for unpaid wages and records the payment made to Cindy.