Silver Co. provides various fringe benefits for its two employees. It provides vacation and personal leave at the rate of one day for each month worked. Its employees earn a combined total of approximately $420 per day. In addition, Silver Co. pays $650 per month in medical insurance premiums for its employees. Silver also contributes $400 per month into a retirement plan for the employees. The federal unemployment tax rate is .06 percent and the state unemployment tax rate is 4.0 percent on the first $7,000 of earnings per employee.

Required

a. Prepare the monthly journal entry for the accrued fringe benefits.

b. Show the effect of the above transaction on a horizontal statements model like the one shown below.

c. If the three employees each worked 250 days, what is Silver Co.€™s total payroll cost (salary, payroll taxes, and fringe benefits) for the year? (Assume that each employee earns $315 per day.)

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Equity Income Statement Cash Flow Assets = Liabilities CashVarious Payables Com. Stk. Ret. Earn.Rev. Exp.Net Inc.