(L.OBJ. 3, 4) Computing and journalizing payroll amounts [25-35 min]
Lee Werner is general manager of United Tanning Salons. During 2010, Werner worked for the company all year at a $6,300 monthly salary. He also earned a year- end bonus equal to 10% of his salary.
Werner’s federal income tax withheld during 2010 was $840 per month, plus $925 on his bonus check. State income tax withheld carne to $90 per month, plus $50 on the bonus. The FICA tax withheld was 8% of the first $90,000 in annual earnings. Werner authorized the following payroll deductions: United Fund contribution of 1% of total earnings, and life insurance of $30 per month.
United incurred payroll tax expense on Werner for FICA tax of 8% of the first $90,000 in annual earnings. The company also paid state unemployment tax of 5.4% and federal unemployment tax of 0.8% on the first $7,000 in annual earnings. In addition, United provides Werner with health insurance at a cost of $150 per month. During 2010, United paid $5,000 into Werner’s retirement plan.
Requirements
1. Compute Werner’s gross pay, payroll deductions, arid net pay for the full year 2010. Round all amounts to the nearest dollar.
2. Compute United’s total 2010 payroll expense for Werner.
3. Make the journal entry to record United’s expense for Werner’s total earnings for the year, his payroll deductions, and net pay. Debit Salary expense and Bonus expense as appropriate. Credit liability accounts for the payroll deductions and Cash for net pay. An explanation is not required.
We need at least 10 more requests to produce the solution.
0 / 10 have requested this problem solution
The more requests, the faster the answer.