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During January, Luxury Cruise Lines incurs employee salaries of $1.3 million. Withholdings in January are $99,450 for the employee portion of FICA, $195,000 for federal income tax, $81,250 for state income tax, and $13,000 for the employee portion of health insurance (payable to Blue Cross/Blue Shield). The company incurs an additional $80,600 for federal and state unemployment tax and $39,000 for the employer portion of health insurance.
Required:
Record the necessary journal entries.

Respuesta :

Parrain

Answer:

Date            Account Title                                              Debit                  Credit

Jan. 31        Salary Expenses                                    $1,300,000

                  Accounts Payable - Insurance                                           $13,000

                  FICA Tax Payable                                                               $99,450

                  Income Tax payable                                                         $276,250

                  Salaries Payable                                                                 $911,300

Working:

Income tax payable = Federal income + State income

= 195,000 + 81,250 = $276,250

Date            Account Title                                              Debit                  Credit

Jan. 31         Salaries Expenses                                 $39,000

                   Accounts Payable                                                              $39,000

Date            Account Title                                              Debit                  Credit

Jan. 31         Payroll Tax expenses                             $180,005

                   FICA Tax Payable                                                             $99,450

                   Federal and State Unemployment Tax                          $80,600

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