The two employees of Silver Company receive various fringe benefits. Silver Company provides vacation at the rate of $335 per day. Each employee earns one day of vacation per month worked. In addition, Silver Company pays a total amount of $690 per month in medical insurance premiums. Silver also contributes a total amount of $440 per month into an employee retirement plan. The federal unemployment tax rate is 6 percent, while the state tax rate is 4 percent. Unemployment taxes apply to the first $7,000 of earnings per employee. Assume a Social Security tax rate of 6 percent and a Medicare tax rate of 1.5 percent. Required a. Prepare the monthly journal entry for the accrued fringe benefits. b. Show the effect of the preceding transaction on a horizontal statements model. c. If the two employees each worked 250 days, what is Silver Company's total payroll cost (salary, payroll taxes, and fringe benefits) for the year? (Assume that each employee earns $335.00 per day.)

The two employees of Silver Company receive various fringe benefits. Silver Company provides vacation at the rate of $335 per day. Each employee earns one day of vacation per month worked. In addition, Silver Company pays a total amount of $690 per month in medical insurance premiums. Silver also contributes a total amount of $440 per month into an employee retirement plan. The federal unemployment tax rate is 6 percent, while the state tax rate is 4 percent. Unemployment taxes apply to the first $7,000 of earnings per employee. Assume a Social Security tax rate of 6 percent and a Medicare tax rate of 1.5 percent. Required a. Prepare the monthly journal entry for the accrued fringe benefits. b. Show the effect of the preceding transaction on a horizontal statements model. c. If the two employees each worked 250 days, what is Silver Company's total payroll cost (salary, payroll taxes, and fringe benefits) for the year? (Assume that each employee earns $335.00 per day.)

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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