Reference no: EM132984246

Question: Ann Winters is a manager at the United Bank. During 2016 she worked for the bank all year at a $6 600 monthly salary. She also earned a year-end bonus equal to15% of her annual salary.

Ann's income tax withheld during 2016 was $820 per month, plus $2 450 on her bonus cheque. Ann authorised the following payroll deductions: charitable fund contribution of 1% of total earnings, and life insurance of $30 per month. United Bank incurred payroll tax expense of 7% of the total payroll.

The bank provided Ann with the following benefits: private health insurance at a cost of $45 per month, and superannuation benefitsto be paid to Ann duringher retirement. During 2016, the bank's cost of Ann's superannuation plan was $8 400.

Requirements

a) Calculate Ann Winters' gross pay, payroll deductions and net pay during 2016.

b) Calculate the bank'stotal 2016 payroll cost for Ann Winters.

c) Make the journal entry to record the bank's expense for Ann Winters' total earnings for the year, her payroll deductions and her net pay.

Debit Salaryexpense and Bonus expense as appropriate. Credit liability accounts for the payroll deductions and Cash for net pay. Then make another journal entry for payroll tax on Ann Winters' earnings. Credit a liability account.