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Lee Werner is general manager of Stoneybrook Salons. During $2016,$ Werner worked for the company all year at a $$14,000$ monthly salary. He also earned a year$-$end bonus equal to $15\%$ of his annual salary. Werner's federal income tax withheld during $2016$ was $$980$ per month, plus $$1,700$ on his bonus check. State income tax withheld came to $$60$ per month, plus $$40$ on the bonus. FICA tax was withheld on the annual earnings. Werner authorized the following payroll deductions: Charity Fund contribution of $2\%$ of total earnings and life insurance of $$35$ per month.

Stoneybrook incurred payroll tax expense on Werner for FICA tax. The company also paid state unemployment tax and federal unemployment tax.

$($Click the icon to view payroll tax rate information.$)$

Read the requirements.

Requirement $1.$ Compute Werner's gross pay, payroll deductions, and net pay for the full year $2016.$ Round all amounts to the nearest dollar.

Begin by computing Werner's gross pay for the year. $($Round all amounts to the nearest dollar.$)$

Gross pay:

Gross Pay

Requirements

Compute Werner's gross pay, payroll deductions, and net pay for the full year $2016.$ Round all amounts to the nearest dollar.

Compute Stoneybrook's total $2016$ payroll expense for Werner.

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.

Make the journal entry to record the accrual of Stoneybrook's payroll tax expense for Werner's total earnings.

More info

For all payroll calculations, use the following tax rates and round amounts to the nearest cent:

Employee:

OASDI: $6\mathrm{.}2\%$ on first $$117,000$ earned; Medicare: $1\mathrm{.}45\%$ up to $$200,000,2\mathrm{.}35\%$ on earnings above $$200,000.$

Employer: OASDI: $6\mathrm{.}2\%$ on first $$117,000$ earned; Medicare: $1\mathrm{.}45\%$ on all earnings; FUTA: $0\mathrm{.}6\%$ on first $$7,000$ earned; SUTA: $5\mathrm{.}4\%$ on first $$7,000$ earned.

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