Question

During January, Luxury Cruise Lines incurs employee salaries of $1.2 million. Withholdings in January are $91,800 for the employee portion of FICA, $180,000 for federal income tax, $75,000 for state income tax, and $12,000 for the employee portion of health insurance (payable to Blue Cross/Blue Shield). The company incurs an additional $74,400 for federal and state unemployment tax and $36,000 for the employer portion of health insurance.

Required:
1. Record the necessary entries in the Journal Entry Worksheet .
2. Record the employee salary expense, withholdong and salaries payable.
3. Record the employer provided fringe benefits.
4. Record the employer payroll taxes.

Answer 1

Answer: Please see below for answer

Step-by-step explanation:

Journal for employee salary and withholdings

Particulars Debit Credit

Salaries Expense $1, 200,000

FICA tax Payable $91,800

Federal Income Tax Withholding Payable $180,000

State Income Tax Withholding Payable $75,000

Health Insurance Payable $12,000

Salaries Payable $841,200

Journal to record employer provided fringe benefits for January

Particulars Debit Credit

Salaries expense(fringe benefits)$ 36,000

Accounts payable to blue cross shield $36,000

Journal to record employer payroll taxes

Particulars Debit Credit

Payroll Tax Expense $166, 200

FICA tax Payable $91,800

unemployment tax payable $74,400