Sherman Lawn Service, Inc., is considering hiring its first “real” employee. The employee will earn \($600\) weekly and will have \($60\) in federal income tax and \($25\) for health insurance withheld, in addition to FICA, each week. Assume the employee will pay no state or other taxes. The employer must pay FICA tax, Federal unemployment tax of .8% of the first \($7,000\) in pay, and State unemployment tax of 2.7% of the first \($7,000\) in pay.
Requirements
1. Calculate the amount of the employee’s weekly net pay.
2. Journalize the entries to accrue the weekly payroll on October 31, to record the employer’s payroll taxes associated with the payroll on the same date, and to pay the payroll on November 4, 2009.