Assume that Erika Kraft is a commercial lender at Swiss Credit Bank in New York City. During 19X2 she worked for the bank all year at a \(\$ 5,195\) monthly salary. She also earned a year-end bonus equal to 12 percent of her salary.

Kraft's federal income tax withheld during 19X2 was \(\$ 822\) per month. Also, there was a onetime withholding of \(\$ 2,487\) on her bonus check. State income tax withheld came to \(\$ 61\) per month, and the city of New York withheld income tax of \(\$ 21\) per month. In addition, Kraft paid one-time withholdings of \(\$ 64\) (state) and \(\$ 19\) (city) on the bonus. The FICA tax witheld was 8 percent of the first \(\$ 60,000\) in annual earnings. Kraft authorized the following payroll deductions: United Fund contribution of 1 percent of total earnings and life insurance of \(\$ 17\) per month.

Swiss Credit Bank incurred payroll tax expense on Kraft for FICA tax of 8 percent of the first \(\$ 60,000\) in annual earnings. The bank also paid state unemployment tax of 5.4 percent and federal unemployment tax of 0.8 percent on the first \(\$ 7,000\) in annual earnings. The bank provided Kraft with the following fringe benefits: health insurance at a cost of \(\$ 48\) per month, and pension benefits to be paid to Kraft during her retirement. During 19X2 Swiss Credit Bank's cost of Kraft's pension program was \(\$ 8,083\).

\section*{Required}
1. Compute Kraft's gross pay, payroll deductions, and net pay for the full year of \(19 \times 2\). Round all amounts to the nearest dollar.
2. Compute Swiss Credit Bank's total 19X2 payroll cost for Kraft.
3. Prepare Swiss Credit Bank's summary general journal entries to record its expense for:

a. Kraft's total earnings for the year, her payroll deductions, and her net pay. Debit Salary Expense and Executive Bonus Compensation as appropriate. Credit liability accounts for the payroll deductions and Cash for net pay.

b. Employer payroll taxes for Kraft. Credit liability accounts.

c. Fringe benefits provided to Kraft. Credit a liability account.
Explanations are not required.
4. How will what you learned in this problem help you manage a business?