The following information is available for the employees of Lighthouse Packing Company for the first week of January 2011:

1. Sarah earns \(\$ 25\) per hour and \(11 / 2\) times her regular rate for hours over 40 per week. Sarah worked 52 hours the first week in January. Sarah's federal income tax withholding is equal to 15 percent of her gross pay. Lighthouse pays medical insurance of \(\$ 60\) per week for Sarah and contributes \(\$ 40\) per week to a retirement plan for her.

2. Karen earns a weekly salary of \(\$ 1,500\). Karen's federal income tax withholding is 18 percent of her gross pay. Lighthouse pays medical insurance of \(\$ 80\) per week for Karen and contributes \(\$ 120\) per week to a retirement plan for her.

3. Vacation pay is accrued at the rate of 2 hours per week (based on the regular pay rate) for Sarah and \(\$ 80\) per week for Karen.

Assume the Social Security tax rate is 6 percent on the first \(\$ 110,000\) of salaries and the Medicare tax rate is 1.5 percent of total salaries. The state unemployment tax rate is 4.2 percent and the federal unemployment tax rate is .8 percent of the first \(\$ 7,000\) of salary for each employee.

Required

a. Compute the gross pay for Sarah for the first week in January.

b. Compute the net pay for both Sarah and Karen for the first week in January.

c. Prepare the journal entry to record the payment of the payroll for the week.

d. Prepare the journal entry to record the payroll tax expense and fringe benefit expense for Lighthouse Packing Company for the week.

e. What is the total cost of compensation expense for the first week of January 2011 for Lighthouse Packing Company?