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ACC121 - Requirements Round all amounts to the nearest...

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Unformatted text preview: Requirements Round all amounts to the nearest dollar. Explanations are not required. P11-3ZB. Brenda Stevens is vice president of Finance for Interstate Leasing. During 2008, she worked for the company all year at a $6,625 monthly salary. She also earned a year-end bonus equal to 10% of her annual salary. Stevens’s federal income tax withheld during 2008 was $737 per month, plus $1,007 on her bonus check. State income tax Withheld came to $43 per month, plus $27 on the bonus. The FICA tax withheld was 7.65% of the first $94,200 in annual earnings. Stevens authorized the following payroll deductions: United Way contribution of 1% of total earnings and life insurance of $19 per month. Interstate incurred payroll tax expense on Stevens for FICA tax of 7.65% of the first $94,200 in annual earnings. The company also paid state unemployment tax of 5.4% and federal unemployment tax of 0.8% on the first $7,000 in annual earnings. In addition, Interstate provides Stevens with health insurance at a cost of $35 per month and retirement benefits of $7,000 for 2008. Requirements 1. Compute Stevens’s gross pay, payroll deductions, and net pay for 2008. 2. Compute Interstate‘s total 2008 payroll expense for Brenda Stevens. 3. Prepare Interstate’s summary journal entries to record the following (explanations are not required): a. Stevens’s total earnings for the year, her payroll deductions, and her not pay, Debit Salary Expense and Executive Bonus Compensation Expense as appropriate. Credit appropriate lia- bility accounts for the payroll deductions and Cash for not pay. 1). Employer payroll taxes on Stevens. c. Benefits provided to Stevens. P11-33B. The ledger of Red Brick Investments at June 30, 2008, the end of the company’s fiscal year, includes the following account balances before adjusting entries: Accounts Payable .................................................................... $105,520 Current Portion of Long-Term Notes Payable ......................... Interest Payable ........................................................................ Salary Payable .......................................................................... continued ..... ...
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