Lenny Worthington is general manager of Crossroad Salons. During 2014, Worthington worked for the company all year at a $ 9,200 monthly salary. He also earned a year-end bonus equal to 5% of his annual salary. Worthington’s federal income tax withheld during 2014 was $ 810 per month, plus $ 928 on his bonus check. State income tax withheld came to $ 80 per month, plus $ 60 on the bonus. FICA tax was withheld on the annual earnings. Worthington authorized the following payroll deductions: Charity Fund contribution of 1% of total earnings and life insurance of $ 15 per month. Crossroad incurred payroll tax expense on Worthington for FICA tax. The company also paid state unemployment tax and federal unemployment tax. In addition, Crossroad provides Worthington with health insurance at a cost of $ 110 per month. During 2014, Crossroad paid $ 7,000 into Worthington’s retirement plan.

1. Compute Worthington’s gross pay, payroll deductions, and net pay for the full year 2014. Round all amounts to the nearest dollar.
2. Compute Crossroad’s total 2014 payroll expense for Worthington.
3. Make the journal entry to record Crossroad’s expense for Worthington’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.

  • CreatedJanuary 16, 2015
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