Rags-to-Riches, a clothing resale store, employs one salesperson, Dee Hunter. Hunter’s straight-time wage is $10 per hour, with time-and-a-half pay for hours above 40. Rags-to Riches withholds income tax (20%), FICA—OASDI (6.2%), and FICA—Medicare (1.45%) from Hunter’s pay. Rags-to-Riches also pays payroll taxes for FICA—OASDI (6.2%), FICA—Medicare (1.45%), and state and federal unemployment (5.4% and 0.6%, respectively).

During the week ended December 26, Hunter worked 50 hours. Prior to this week, she had earned $2,000.

Requirements
(Round all amounts to the nearest dollar.)
1. Compute Hunter’s gross pay and net (take-home) pay for the week.

2. Record the payroll entries that Rags-to-Riches would make for each of the following

a. Accrual of salaries and wages expense and subsequent payment related to Hunter

b. Employer payroll taxes accrual related to Hunter

c. Payment of all payroll taxes (employee and employer related)

3. How much was Rags-to-Riches’ total payroll expense for the week?