Question

Answer 1

Requirement : Calculation of Whitney's gross pay, payroll deduction and net pay

	Amount in $
Particulars	Amount yearly
Salary (A) [$13,400*12]	1,60,800
Bonus @10% (B)	16,080
Gross pay (C=A+B)	1,76,880
Payroll deduction
Less : With-held federal income tax on salary (D)	12,864
Less : With-held federal income tax on bonus (E )	1,608
Less : With-held State income tax on salary (F)	1,200
Less : With-held State income tax on bonus (G)	80
Less : Charity fund contribution @1% (H)	1,769
Less : Life insurance deduction @30 per month (I )	360
Total deduction (J=D+E+F+G+H+I)	17,881
Net pay (C-J)	1,58,999

Requirement 2: Unites's total 2018 payroll tax expenses

Particulars	Amount in $
Total salary	1,76,880
Tax @ 6.42% on first $118,500	7,608
Tax @1.45% upto $200,000 (i.e. [$176,880-$118,500]*1.45%)	847
Total tax	8,455

Requirement 3 : Journal entry
Salaries Expenses       ..........Dr	1,60,800
Bonus Expenses          ..........Dr	16,080
United Statest tax     ...........Cr	15,752
Payroll deduction      ..........Cr	2,129
Cash                                 ..........Cr	1,58,999

Requirement 5 : Journal entry for payment of payroll withholding and taxes
United Statest tax     ...........Dr	15,752
Payroll deduction      ..........Dr	2,129
Cash                                ...........Cr	17,881