Answered: e. Record any journal entries…

College Accounting (Book Only): A Career Approach

13th Edition

ISBN:9781337280570

Author:Scott, Cathy J.

Publisher:Scott, Cathy J.

Chapter8: Employer Taxes, Payments, And Reports

Section: Chapter Questions

Problem 3E

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Question

Ice Falls Corp. has a total monthly gross salaries and wages of $610,000 for June. Assume the following tax rates.

Personal income tax rate	Federal unemployment tax rate	State unemployment tax rate	FICA tax rate
20%	0.8%	5.4%	7.65%

Additionally, employees pay 2% of their salaries towards union dues, while the employer pays a total of $48,000 for employees’ health insurance. Record any journal entries separately for the employees’ pay/withholding, fringe benefits, and the employer’s payroll tax on June 30 assuming employees are paid on July 7. The assumed tax rates are shown below. Ignore any real-world tax limitations.

Definition Definition Benefits in addition to compensation that companies give to their employees. Fringe benefits can boost morale and productivity and keep employees motivated. Companies often use fringe benefits as a competitive advantage to recruit and retain employees. Examples of fringe benefits include pensions, vacation time, tuition reimbursement, free or subsidized meals, and gym memberships.

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