Question

During January, Luxury Cruise Lines incurs employee salaries of $1.2 million. Withholdings in January are $91,800 for the employee portion of FICA, $180,000 for federal income tax, $75,000 for state income tax, and $12,000 for the employee portion of health insurance (payable to Blue Cross/Blue Shield). The company incurs an additional $74,400 for federal and state unemployment tax and $36,000 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

1. Journal entry to record the employee salary expense, withholdings, and salaries payable
No.	General Journal	Debit	Credit
1	Salaries expense	$1,200,000
	FICA taxes payable		$91,800
	Employee federal income tax payable		$180,000
	Employee stae income tax payable		$75,000
	Accounts payable (Blue Cross/Blue Shield)		$12,000
	Salaries payable                         [Gross salary - all deductions = $1,200,000 - ($91,800 + $180,000 + $75,000 + $12,000)]		$841,200
	(To record salary expense and related withholdings)
2. Journal entry to Record the employer-provided fringe benefits
No.	General Journal	Debit	Credit
2	Salaries expense	$36,000
	Accounts payable (Blue Cross/Blue Shield)		$36,000
	(To record fringe benefits provided to the employees)
3. Journal entry to record the employer payroll taxes.
No.	General Journal	Debit	Credit
3	Payroll tax expense	$166,200
	FICA taxes payable		$91,800
	Unemployment taxes payable		$74,400
	(To record payroll tax expenses]