Aggie Co. sells agricultural products. Aggie pays its salespeople a salary plus a commission. The salary is the same for each salesperson, $1,000 per month. The commission varies by length of employment and is a percentage of the company’s total gross sales. Each salesperson starts with a commission of 1.0%, which is increased an additional 0.5% for each full year of employment with Aggie, to a maximum of 5.0%.

The total gross sales for the month of January were $120,000.

Aggie has six salespeople as follows:

Number of Years Employment

Frank . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10

Sally . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9

Tina . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8

Barry . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6

Mark . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3

Lisa . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.75

Assume that the FICA rate is 7.65%, the FUTA rate is 6.2%, and the state unemployment rate is 5.4%. (Assume that the federal government allows the maximum credit for state unemployment tax paid.) The federal income tax withholding rate is 30%. Compute the January salaries and commissions expense, and make any necessary entries to record the payroll transactions including cash payment of all the taxes payable.