uring January, Luxury Cruise Lines incurs employee salaries of $1.4 million. Wit

Question

uring January, Luxury Cruise Lines incurs employee salaries of $1.4 million. Withholdings in January are $107,100 for the employee portion of FICA, $210,000 for federal income tax, $87,500 for state income tax, and $14,000 for the employee portion of health insurance (payable to Blue Cross/Blue Shield). The company incurs an additional $86,800 for federal and state unemployment tax and $42,000 for the employer portion of health insurance.

Record the necessary entries in the Journal Entry Worksheet below.

Record the employee salary expense, withholdings, and salaries payable.

Record the employer-provided fringe benefits.

Record the employer payroll taxes.

Explanation / Answer

Ans) 1)

2) Fringment banefit

14000+42000=$56000

3) Payroll Tax i.e Fedral tax 210000+86800=$296800

Particular Amount Salary Exp 1400000 A Total 1400000 Withholdings 107100 Fedreal Tax 210000 Income tax 87500 B Total 404600 Salary payable(A-B) $995400

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