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An employee and employer cost-share pension plan contributions and health insurance premium payments. If the employee covers 35% of the pension plan contribution and 25% of the health insurance premium, what would be the employee’s total benefits responsibility if the total pension contribution was $900, and the health insurance premium was$375?

Include the journal entry representing the payroll benefits accumulation for the employer in the month of February

User Dskinner
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Final answer:

The employee's total benefits responsibility would be $408.75. The journal entry representing the payroll benefits accumulation for the employer in the month of February would include debiting the Pension Plan Contribution Expense account with $900 and crediting the Pension Plan Liability account with $900, as well as debiting the Health Insurance Expense account with $375 and crediting the Health Insurance Liability account with $375.

Step-by-step explanation:

In order to determine the employee's total benefits responsibility, we need to calculate the employee's portion of the pension plan contribution and health insurance premium. If the total pension contribution is $900 and the employee covers 35%, then the employee's portion is 35% of $900, which is $315. Similarly, if the health insurance premium is $375 and the employee covers 25%, then the employee's portion is 25% of $375, which is $93.75. Therefore, the employee's total benefits responsibility would be $315 + $93.75 = $408.75.

The journal entry representing the payroll benefits accumulation for the employer in the month of February would include debiting the Pension Plan Contribution Expense account with $900 and crediting the Pension Plan Liability account with $900. This represents the employer's portion of the pension plan contribution. Similarly, the journal entry would also include debiting the Health Insurance Expense account with $375 and crediting the Health Insurance Liability account with $375. This represents the employer's portion of the health insurance premium.

User Jun Yin
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