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 $1,500,000Employee contribution to voluntary retirement plan 63,000Medical insurance premiums paid by employer 31,500Life insurance premiums paid by employer 6,000Federal and state income tax withheld 375,000Social 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.
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
Required:
1. Record the employee salary expense, withholdings, and salaries payable.
2. Record the employer-provided
3. Record the employer payroll taxes.
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