question archive During January, Luxury Cruise Lines incurs employee salaries of $2
During January, Luxury Cruise Lines incurs employee salaries of $2
Subject:AccountingPrice:2.86 Bought8
During January, Luxury Cruise Lines incurs employee salaries of $2.4 million. Withholdings in January are $183,600 for the employee portion of FICA, $360,000 for federal income tax, $150,000 for state income tax, and $24,000 for the employee portion of health insurance (payable to Blue Cross Blue Shield). The company incurs an additional $148,800 for federal and state unemployment tax and $72,000 for the employer portion of health insurance.
Required:
1.-3. Record the necessary entries in the Journal Entry Worksheet below. (If no entry is required for a particular transaction/event, select "No Journal Entry Required" in the first account field. Enter your answers in dollars, not in millions (i.e. 5 should be entered as 5,000,000).)
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January 31 Salaries Expense 2,400,000
Income Tax Payable 510,000
FICA tax payable 183,600
Accounts payable 24,000
Salaries payable 1,682,400
January 31 Salaries Expense 72,000
Accounts payable 72,000
January 31 Payroll tax expense 332,400
FICA tax payable 183,600
Unemployment tax payable 148,800
Step-by-step explanation
Date Accounts titles and Explanation Debit ($) Credit ($)
1. Salaries expense 2,400,000
Income tax payable (360,000+ 150,000) 510000
FICA tax payable 183,600
Accounts payable 24,000
Salaries payable 1,682,400
(To record employee salary expense and with holdings)
2. Salaries expense 72,000
Accounts payable 72,000
(To record the fringe benefit provided by employer)
3. Payroll tax expense 332,400
FICA tax payable 183,600
Unemployment tax payable 148,800
(To record employer payroll taxes)
