Question

During January, Luxury Cruise Lines incurs employee salaries of $2.3 million. Withholdings in January are $175,950 for the employee portion of FICA $345,000 for federal income tax, $143,750 for state income tax, and $23,000 for the employee portion of health insurance (payable to Blue Cross Blue Shield). The company incurs an additional $142,600 for federal and state unemployment tax and $69,000 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).) View transaction list Journal entry worksheet 2 3 1 Record the employee salary expense, withholdings, and salaries payable Note: Enter debits before credits General Journal Debit Credit Date January 31

Answer 1

Solution: Journal entries Page! $ Debit Moi Date General Journal Credit 2300,000 - January 31 Salaries Expense 175,950 FICA Tax Payable Income Tax Payable (345,000+ 143,750) 488,750 Accounts Payable 23,000 Salaries Payable (remainder 1612,300 (to recand employee salary expense, with holdings and saleries payable) 2 January 31 69,000 69,000 Salaries Expense Accounts Payable (To second employer- provided fringe benefits

Page 2 Moi Date General Journal Debit Credit 318,550 3 January 31 Payroll Tax Expense FICA Tax Payable 175,950 Unemployment Tax 142,600 Payable (To record employer payroll texes)