Athena Company provides employee health insurance that costs $14,200 per month.
ID: 2482939 • Letter: A
Question
Athena Company provides employee health insurance that costs $14,200 per month. In addition, the company contributes an amount equal to 5% of the employees' $142,000 gross salary to a retirement program. The entry to record the accrued benefits for the month would include a:
Debit to Employee Retirement Program Payable $7,100.
Credit to Employee Benefits Expense $14,200.
Debit to Payroll Taxes Expense $21,300.
Debit to Employee Benefits Expense $21,300.
Debit to Medical Insurance Payable $14,200.
Explanation / Answer
Total Employee Benefit Expenses for the month = 14,200 + (142,000 x 5%) = $21,300
Entry:
Debit: Employee Benefits Expense $21,300
Credit: Employee Retirement Program Payable $7,100
Credit: Employee Health Insurance Payable $14,200
Thus, Option 4.
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