Vacation Destinations offers its employees the option of contributing up to 7% of their salaries to a voluntary retirement plan, with the employer matching their contribution. The company also pays 100% of medical and life insurance premiums. Assume that no employee's cumulative wages exceed the relevant wage bases. Payroll information for the first biweekly payroll period ending February 14 is listed below. Wages and salaries $1,500,000 Employee contribution to voluntary retirement plan 63,000 Medical insurance premiums paid by employer 31,500 Life insurance premiums paid by employer 6,000 Federal and state income tax withheld 375,000 Social Security tax rate 6.20% Medicare tax rate 1.45% Federal and state unemployment tax rate 6.20% Required: 1. Record the employee salary expense, withholdings, and salaries payable. 2. Record the employer-provided fringe benefits. 3. Record the employer payroll taxes. Record the necessary entry for the scenarios given above. (If no entry is required for a transaction/event, select "No Journal Entry Required" in the first account field.)
Vacation Destinations offers its employees the option of contributing up to 7% of their salaries to a voluntary retirement plan, with the employer matching their contribution. The company also pays 100% of medical and life insurance premiums. Assume that no employee's cumulative wages exceed the relevant wage bases. Payroll information for the first biweekly payroll period ending February 14 is listed below. Wages and salaries $1,500,000 Employee contribution to voluntary retirement plan 63,000 Medical insurance premiums paid by employer 31,500 Life insurance premiums paid by employer 6,000 Federal and state income tax withheld 375,000 Social Security tax rate 6.20% Medicare tax rate 1.45% Federal and state unemployment tax rate 6.20% Required: 1. Record the employee salary expense, withholdings, and salaries payable. 2. Record the employer-provided fringe benefits. 3. Record the employer payroll taxes. Record the necessary entry for the scenarios given above. (If no entry is required for a transaction/event, select "No Journal Entry Required" in the first account field.)
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Vacation Destinations offers its employees the option of contributing up to 7% of their salaries to a voluntary retirement plan, with the employer matching their contribution. The company also pays 100% of medical and life insurance premiums. Assume that no employee's cumulative wages exceed the relevant wage bases. Payroll information for the first biweekly payroll period ending February 14 is listed below.
| Wages and salaries | $1,500,000 |
|---|---|
| Employee contribution to voluntary retirement plan | 63,000 |
| Medical insurance premiums paid by employer | 31,500 |
| Life insurance premiums paid by employer | 6,000 |
| Federal and state income tax withheld | 375,000 |
| Social Security tax rate | 6.20% |
| Medicare tax rate | 1.45% |
| Federal and state |
6.20% |
Required:
1. Record the employee salary expense, withholdings, and salaries payable.
2. Record the employer-provided
3. Record the employer payroll taxes.
Record the necessary entry for the scenarios given above. (If no entry is required for a transaction/event, select "No
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