Question

Problem 8-4A Record payroll (LO8-3) Vacation Destinations offers its employees the option of contributing up to 6% of their salaries to a voluntary retirement plan, with the employer matching their contribution. The company also pays 100% of medical and life insurance premiums. Assume that no employee's cumulative wages exceed the relevant wage bases. Payroll information for the first biweekly payroll period ending February 14 is listed below. Wages and salaries Employee contribution to voluntary retirement plan Medical insurance premiums paid by employer Life insurance premiums paid by employer Federal and state income tax withheld Social Security tax rate Medicare tax rate Federal and state unemployment tax rate $750, eee 31,580 15,750 3,eee 187.500 6.2ex 1.45% 6.2ex Required: 1. Record the employee salary expense, withholdings, and salaries payable. 2. Record the employer-provided fringe benefits 3. Record the employer payroll taxes. Record the necessary entry for the scenarios given above. (If no entry is required for a transaction event, select "No Journal Entry Required in the first account field.)

Answer 1

No.	Date	General Journal	Debit	Credit
1	February 14	Salaries Expense	$750,000
		FICA taxes payable       [($750,000 x 6.2%) + ($750,000 x 1.45%)]		$57,375
		Income tax payable		$187,500
		Accounts payable (Retirement plan)		$31,500
		Salaries Payable               [Gross Earnings - Total deductions = $750,000 - $57,375 - $187,500 - $31,500]		$473,625
2	February 14	Salaries Expense                                      [Total benefits = $31,500 + $15,750 + $3,000]	$50,250
		Accounts payable (Retirement plan)		$31,500
		Accounts payable (Medical insurance)		$15,750
		Accounts payable (Life insurance)		$3,000
3	February 14	Payroll tax Expenses          [$57,375 + $46,500]	$103,875
		FICA taxes payable       [($750,000 x 6.2%) + ($750,000 x 1.45%)]		$57,375
		Unemployment tax payable      [$750,000 x 6.20%]		$46,500