Question

Kashi Sales, L.L.C., produces healthy, whole-grain foods such as breakfast cereals, frozen dinners, and granola bars. Assume payroll for the month of January was $410,000 and the following withholdings, fringe benefits, and payroll taxes apply: Federal and state income tax withheld Health insurance premiums (Blue Cross) paid by employer Contribution to retirement plan (Fidelity) paid by employer FICA tax rate (Social Security and Medicare) Federal and state unemployment tax rate $126,000 12,100 51,000 7.65% 6.20% Assume that Kashi has paid none of the withholdings or payroll taxes by the end of January (record them as payables), and no employee's cumulative wages exceed the relevant wage bases. Required: 1. Record the employee salary expense, withholdings, and salaries payable. 2. Record the employer-provided fringe benefits. 3. Record the employer payroll taxes. (If no entry is required for a transaction/event, select "No Journal Entry Required" in the first account field.)

Answer 1

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Naming convention is not available, can be slightly different: Solution: Credit Date Jan.31 Debit 410000 126000 31365 252635 Jan.31 Journal entries Account title and explaination Salaries Expense Employee Federal and State Income taxes payable FICA taxes payable (410000*7.65%) Salaries Payable (plug) (To record the accrual of salaries expense) Employee benefit expense Health insurance payable Retirement plan payable (To record the employer provided fringe benefits) Payroll tax expense Federal and State unemployment taxes payable FICA taxes payable (To record the employer payroll taxes) 63100 12100 51000 Jan.31 56785 25420 (410000*6.2%) 31365