Lynn Roth is a vice-president at Bellwether Financials. During 2022, Lynn worked the complete year for Bellwether, at a weekly base salary of $3,261. She also earned a year-end bonus equalled to 6% of her base salary at the end of the year. Lynn’s federal income tax withheld during 2022 was $1,125 per pay period. Also, there was a one-time federal income tax of $4,578 on the bonus she earned. In addition, Lynn paid 5.95% of her gross pay in CPP until her maximum contribution of $3,754.45 was met, and 1.63% of her gross pay in EI until her maximum contribution of $1,002.45 was met. Assume, no basic exemption amount for CPP. Lynn has authorized Bellwether to make the following payroll deductions: Register Retirement Saving Plan (RRSP) contribution of $100 per pay period, and $50 per pay period as a donation to Michael Garron Hospital. Bellwether incurs CPP expense equal to the amount deducted from Lynn’s pay and EI expense equal to 1.4 times the amount Lynn paid. In addition, Bellwether pays $50 per pay period for a dental and drug insurance plan, and a pension benefit of 5% of her base salary.

Required – where necessary, round to the nearest cent – show all calculations – 10 marks: 

1) Compute Lynn’s gross pay, payroll deductions, and net pay for the FULL YEAR of 2022. Worth 4 marks. 

2) Compute Bellwether’s total 2022 payroll expenses for Lynn. Worth 2 marks. 

3) Prepare Bellwether’s journal entries to record its total payroll expenses and all associated payables. Worth 3 marks.

4) If there was a basic exemption amount of $3,500 for CPP, would this change Lynn’s CPP withholdings for 2022? Explain your answer.

Answer rating: 100% (QA)

Gross Pay Weekly Base Salary 3261 Annual Base Salary 3261 x 52 169572 YearEnd Bonus 6 x 169572 10174... View the full answer