Question

During January, Luxury Cruise Lines incurs employee salaries of $1.1 million. Withholdings in January are $84,150 for the employee portion of FICA, $165,000 for federal income tax, $68,750 for state income tax, and $11,000 for the employee portion of health insurance (payable to Blue Cross/Blue Shield). The company incurs an additional $68,200 for federal and state unemployment tax and $33,000 for the employer portion of health insurance. Required: 1., 2. & 3. Record the necessary entries in the Journal Entry Worksheet below. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Enter your answers in dollars, not in millions.)

Answer 1

See the explanation below.

Step-by-step explanation:

Details Dr ($) Cr ($)

Salary expenses 1,100,000

Employee portion of FICA payable 84,150

Federal income tax payable 165,000

Employee's State income tax payable 68,750

Employee portion of health ins. payable 11,000

Net salaries payable 771,100

To record gross salaries, withholding taxes and net salaries

Employer portion of FICA expenses 84.150

Federal and state unemployment tax 68,200

Employer portion of health insurance 33,000

Employer portion of FICA payable 84,150

Fed. and state unemploymt tax payable 68,200

Employer portion of health ins. payable 33,000

To record employer's payroll taxes and other expenses

Employee portion of FICA payable 84,150

Federal income tax payable 165,000

State income tax payable 68,750

Employee portion of health ins. payable 11,000

Net salaries payable 771,100

Employer portion of FICA payable 84,150

Fed. and state unemploymt tax payable 68,200

Employer portion of health ins. payable 33,000

Cash 1,285,350

To record payment of payroll liabilities and other expenses