Problem 8-4b record payroll (lo8-3) emily turnbull, president of aerobic equipment corporation, is concerned about her employees’ well-being. the company offers its employees free medical, dental, and life insurance coverage. it also matches employee contributions to a voluntary retirement plan up to 5% of their salaries. assume that no employee’s cumulative wages exceed the relevant wage bases. payroll information for the biweekly payroll period ending january 24 is listed below. wages and salaries $ 1,750,000 employee contribution to voluntary retirement plan 87,500 medical insurance premiums paid by employer 35,000 dental insurance premiums paid by employer 12,250 life insurance premiums paid by employer 6,125 federal and state income tax withheld 376,250 fica tax rate 7.65 % federal and state unemployment tax rate 6.20 % required: 1., 2. & 3. record the necessary journal entries. (if no entry is required for a transaction/event, select "no journal entry required" in the first account field.)

The journal entries are as follows:

(i)

Wages and salaries A/c                                     Dr. $1,750,000

To Employee contribution to Retirement plan                           $87,500

To FICA Taxes payable                                                                $133,875

To Federal and Income tax withheld                                           $376,250

To Net Wages and salaries payable                                             $1,152,375

(To record employees salary expense, with-holdings, and salaries payable)

(ii)

Payroll Tax expenses A/c                   Dr. $284,375

To Medical Insurance Premium                                     $35,000

To Dental Insurance Premium                                      $12,250

To Life Insurance Premium                                           $6,125

To Federal and State Unemployment Tax                   $108,500

To Contribution to voluntary retirement plan               $122,500

(To record the employer payroll taxes)

Workings:

FICA taxes payable = $1,750,000 × 7.65%

                                 = $133,875

Net Wages & Salaries Payable:

= Wages and Salaries - Employee contribution to Retirement plan - FICA Taxes payable - Federal and Income tax withheld

= $1,750,000 - $87,500 - $133,875 - $376,250

= $1,152,375

Federal and State Unemployment Tax = $1,750,000 × 6.20%

                                                                = $108,500

Contribution to voluntary retirement plan:

= Employee contribution to Retirement plan + Medical Insurance Premium

= $87,500 + $35,000

= $122,500

was my answer wrong?

answer; automated fingerprint;