Question

During January, Luxury Cruise Lines incurs employee salaries of $1.8 million. Withholdings in January are $137,700 for the employee portion of FICA, $270,000 for federal income tax, $112,500 for state income tax, and $18,000 for the employee portion of health insurance (payable to Blue Cross Blue Shield). The company incurs an additional $111,600 for federal and state unemployment tax and $54,000 for the employer portion of health insurance. Required: 1.-3. Record the necessary entries in the Journal Entry Worksheet below. (If no entry is required for a particular transaction/event, select "No Journal Entry Required" in the first account field. Enter your answers in dollars, not in millions (i.e. 5 should be entered as 5,000,000).)

Answer 1

Journal Entry Answer General Journal Debit Credit Nos. Date Salaries Expense $1,800,000 1 Jan, 31 Income Tax Payable ($270,000 $112,500) $382,500 $137,700 FICA Tax Payable $18,000 Fringe Benefits Payable Salaries Payable (Net pay) (To record the Net Salaries Payable) $1,261,800 Salaries Expense $54,000 2 Jan, 31 $54,000 Fringe Benefits Payable (To record the Fringe Benefits payable) Payroll Tax Expense FICA Tax Payable $249,300 3 Jan, 31 $137,700 $111,600 Unemployment Tax Payable (To record the payroll tax expense)