Caribbean Tours’ total payroll for the month of January was $600,000. The following withholdings, fringe benefits, and payroll taxes apply:Federal and state income tax withheld $60,000Health insurance premium paid by employer (Bluecross) 10,800Contribution to retirement plan paid by employer (Fidelity) 24,000FICA tax rate (Social Security and Medicare) 7.65%Federal and state unemployment tax rate 6.20%Assume that none of the withholdings or payroll taxes has been paid by the end of January (record them as payables), and no employees’ cumulative wages exceed the relevant wage bases.1. Record the employee salary expense, withholdings, and salaries payable.2. Record the employer-provided fringe benefits.3. Record the employer payroll taxes.

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TomShelby TomShelby · Answer 1 · 2019-11-11T19:12:45+01:00

Answer:

wages expense 600,000 debit

FICA taxes payables 45,900 credit

Federal and state income tax payable 60,000 credit

Wages payable 494,100 credit

--to record employees salaries and witholdings--

payroll tax expense 83,100 debit

Frindge benefit expense 34,800 debit

FICA taxes payables 45,900 credit

FUTA&SUTA tax payables 37,200 credit

Health insurance payable 10,800 credit

Retirement fund obligation 24,000 credit

Explanation:

taxes:

FICA is paid by both, employee and employer. While FUTA&SUTA only by the employer

FICA 600,000 x 7.65% = 45,900

FUTA&SUTA 600,000 x 6.20% = 37,200

fringe benefit:

as they are done by the employer it will create liabilities and obligation