Complete ALL requirements and ROUND ALL AMOUNTS TO NEAREST DOLLAR
Chapter12: Current Liabilities
Section: Chapter Questions
Problem 10PA: Lemur Corp. is going to pay three employees a year-end bonus. The amount of the year-end bonus and...
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Complete ALL requirements and ROUND ALL AMOUNTS TO NEAREST DOLLAR
Transcribed Image Text:Lee Werner is general manager of Stoneybrook Salons. During 2024, Werner worked for the company all year at a $12,900 monthly salary. He also earned a year-end
bonus equal to 20% of his annual salary. Werner's federal income tax withheld during 2024 was $4,128 per month, plus $6,811 on his bonus check. State income tax
withheld came to $120 per month, plus $80 on the bonus. FICA tax was withheld on the annual earnings. Werner authorized the following payroll deductions: Charity Fund
contribution of 4% of total earnings and life insurance of $50 per month.
Withholding deductions:
Federal income tax
Salary
Bonus
Gross Pay
Now compute Werner's payroll deductions and net pay for the year. (Round all amounts to the nearest dollar.)
Net pay:
Gross pay
State income tax
Employee OASDI tax
Employee Medicare tax
Charity fund contribution
Life insurance
Total withholdings
Employer Payroll Taxes:
S
Total Employer Payroll Tax
Total Payroll Expense
154,800
30,960
185,760
S
$ 56,347
1,520
8,240
2,694
7,430
600
Net (take-home) pay
Requirement 2. Compute Stoneybrook's total 2024 payroll tax expense for Werner. (Round all amounts to the nearest dolla
$ 185,760
76,831
$ 108,929
C
More info
For all payroll calculations, use the following tax rates and round amounts to the
nearest cent:
Employee:
Employer:
Stoneybrook incurred payroll tax expense on Werner for FICA tax. The company also paid
state unemployment tax and federal unemployment tax.
i (Click the icon to view payroll tax rate information.)
OASDI: 6.2% on first $132,900 earned; Medicare: 1.45% up to
$200,000, 2.35% on earnings above $200,000.
OASDI: 6.2% on first $132,900 earned; Medicare: 1.45%; FUTA:
0.6% on first $7,000 earned; SUTA: 5.4% on first $7,000 earned.
Requirements
Print
Done
1. Compute Werner's gross pay, payroll deductions, and net pay for the full year
2024. Round all amounts to the nearest dollar.
2. Compute Stoneybrook's total 2024 payroll tax expense for Werner.
3. Make the journal entry to record Stoneybrook's expense for Werner's total
earnings for the year, his payroll deductions, and net pay. Debit Salaries
Expense and Bonus Expense as appropriate. Credit liability accounts for the
payroll deductions and Cash for net pay. An explanation is not required.
4. Make the journal entry to record the accrual of Stoneybrook's payroll tax
expense for Werner's total earnings.
5. Make the journal entry for the payment of the payroll withholdings and taxes.
- X
X
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