Question
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.
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 6% of their salaries. Assume that no employees cumulative wages exceed the relevant wage bases. Payroll information for the biweekly payroll period ending January 24 is listed below.
Wages and salaries | $2,500,000 |
---|---|
Employee contribution to voluntary retirement plan | 125,000 |
Medical insurance premiums paid by employer | 50,000 |
Dental insurance premiums paid by employer | 17,500 |
Life insurance premiums paid by employer | 8,750 |
Federal and state income tax withheld | 537,500 |
FICA tax rate | 7.65% |
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.
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