Question

During January, Luxury Cruise Lines incurs employee salaries of $1.4 million. Withholdings in January are $107,100 for the employee portion of FICA, $210,000 for federal income tax, $87,500 for state income tax, and $14,000 for the employee portion of health insurance (payable to Blue Cross/Blue Shield). The company incurs an additional $86,800 for federal and state unemployment tax and $42,000 for the employer portion of health insurance.

Required:

1., 2.& 3. Record the necessary entries in the Journal Entry Worksheet below. (If no entry is required for a 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).)

Answer 1

		Debit	Credit
January 31	Salaries expense	1400000
	Income tax payable		297500	=210000+87500
	FICA tax payable		107100
	Fringe benefits payable		14000
	Salaries payable		981400
January 31	Salaries expense	42000
	Fringe benefits payable		42000
January 31	Payroll tax expense	193900
	FICA tax payable		107100
	Unemployment tax payable		86800