During January, Luxury Cruise Lines incurs employee salaries of $3 million. Withholdings in January are $229,500 for the employee portion of FICA, $450,000 for federal income tax, $187,500 for state income tax, and $30,000 for the employee portion of health insurance (payable to Blue Cross Blue Shield). The company incurs an additional $186,000 for federal and state unemployment tax and $90,000 for the employer portion of health insurance. Record the employer payroll taxes.

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Business

Marquise Green

22 December, 14:44

During January, Luxury Cruise Lines incurs employee salaries of $3 million. Withholdings in January are $229,500 for the employee portion of FICA, $450,000 for federal income tax, $187,500 for state income tax, and $30,000 for the employee portion of health insurance (payable to Blue Cross Blue Shield). The company incurs an additional $186,000 for federal and state unemployment tax and $90,000 for the employer portion of health insurance. Record the employer payroll taxes.

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January 31

Salaries Expense 3,000,000 (Debit)

Income Tax Payable 637,500 (Credit)

FICA tax payable 229,000 (Credit)

Accounts payable 30,000 (Credit)

Salaries payable 2,103,000 (Credit)

January 31

Salaries Expense 90,000 (Debit)

Accounts Payable 90,000 (Credit)

January 31

Payroll tax expense 415,500 (Debit)

FICA tax payable 229,500 (Credit)

Unemployment tax payable 186,000 (Credit)