| Vacation Destinations offers its employees the option of contributing up to 5% 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 | $ 950,000 | ||||||
| Employee contribution to voluntary retirement plan | 39,900 | ||||||
| Medical insurance premiums paid by employer | 19,950 | ||||||
| Life insurance premiums paid by employer | 3,800 | ||||||
| Federal and state income tax withheld | 237,500 | ||||||
| Social Security tax rate | 6.20 % | ||||||
| Medicare tax rate | 1.45 % | ||||||
| Federal and state unemployment tax rate | 6.20 % | ||||||
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1
Record the employee salary expense, withholdings, and salaries payable.
FEB.14 Record the employee salary expense, withholdings, and salaries payable.
| Date | Description | Debit $ | Credit $ |
| 14-Feb | Salaries Expenses | 950000 | |
| FICA Tax Payable | 72675 | ||
| Accounts Payable(Retirement Plan) | 39900 | ||
| Incometax Payable | 237500 | ||
| Salaries Payable ( to the balance) | 599925 |
2.Record the employer-provided fringe benefits.
FEB.14 Record the employer-provided fringe benefits.
3.Record the employer payroll taxes FEB.14
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