Beth Corbin's regular hourly wage rate is $14, and she receives an hourly rate of $21 for work in excess of 40 hours. During a January pay period, Beth works 50 hours. Beth's federal income tax withholding is $98, she has no voluntary deductions, and the FICA tax rate is 7.65%. Use January 15 for the end of the pay period and the payment date. Prepare the journal entries to record:

a. Beth's pay for the period.
b. The payment of Beth's wages.

a.

Jan 15

DR Salaries and Wages  $770  

CR Federal Income tax payable    $98      

CR FICA taxes payable    $58.91  

CR Salaries and wages payable    $613.09

Working.

Beth's gross pay = (14 * 40 hours) + (21 * 10 extra hours above the 40)

= 560 + 210

= $770

FICA Taxes = 770 * 7.65%

= $58.91

b.

Jan 15

DR Salaries and Wages payable    $613.09  

CR Cash  $613.09

$888,000

Explanation:

Calculation to determine What amount should be reported as land

Purchased a tract of land as a factory site $800,000

Add Legal fees for purchase contract ownership $10,000

Add Title guarantee insurance 16,000

Add Cost to raze old building $70,000

Less Proceeds from sale of salvaged materials $8,000

Land $888,000

($800,000 + $10,000 + $16,000 + $70,000 –$8,000)

Therefore The amount that should be reported as land will be $888,000