The auditors of TQ, Inc., a calendar-year corporation, obtained the selected information for years 1 and 2 located on the Financial Information tab. The auditors are performing analytical procedures relative to the expectations of expenses for year 2 and have established a materiality threshold of 5% of the year 2 account balance. For each of the accounts in column A below, consider the additional notes in column B and the information in the Financial Information tab, and:

	In column C, enter the auditor's expectation of year 2 expense.
	Round all amounts to the nearest dollar.
	Consider each account independently.

Expenses	Additional notes	Auditors expectation
1. Bonus expenses	Bonus expense for the year 2 is expected to be 7% of total prior-year wage and salary expense if total unit sales increase by more than 5%
2. Short-term disability expense	Short-term disability expense for year 2 is expected to be 2% of the prior-year wage and salary expense.
3. Office salary expense	Average salaries increased 4% effective July 1, year 2. Headcount was 40 in year 1 and increased to 48 on July 1, year 2.
4. 401(K) match expense	TQ matches 50% of the first 6% of total current-year compensation (salaries, wages, and bonuses) for participating employees. Historically, 80% of TQs employees have participated in the 401(K) plan.
5. Hourly payroll tax expense	Historically, hourly payroll tax expense, excluding federal unemployment tax, has been 8% of total wages. In addition, federal unemployment tax was expected to increase on October 1, year 2, from 1% to 2%. Total hourly payroll is expected to increase by 2%.
6. Health insurance expense	Total headcount was 200 employees for year 1, and 260 for year 2. Health insurance premiums are expected to increase 12% in year 2.