Main Street Bakery 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 Employee contribution to voluntary retirement plan Medical insurance premiums paid by employer Life insurance premiums paid by employer Federal and state income tax withheld Social Security tax rate Medicare tax rate Federal and state unemployment tax rate Required: 1. Record the employee salary expense, withholdings, and salaries payable. 2. Record the employer-provided fringe benefits. 3. Record the employer payroll taxes. $1,050,000 44,100 22,050 4,200 262,500 6.20% 1.45% 6.20% 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.)
Main Street Bakery 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 Employee contribution to voluntary retirement plan Medical insurance premiums paid by employer Life insurance premiums paid by employer Federal and state income tax withheld Social Security tax rate Medicare tax rate Federal and state unemployment tax rate Required: 1. Record the employee salary expense, withholdings, and salaries payable. 2. Record the employer-provided fringe benefits. 3. Record the employer payroll taxes. $1,050,000 44,100 22,050 4,200 262,500 6.20% 1.45% 6.20% 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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Transcribed Image Text:Main Street Bakery 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
Employee contribution to voluntary retirement plan
Medical insurance premiums paid by employer
Life insurance premiums paid by employer
Federal and state income tax withheld
Social Security tax rate
Medicare tax rate
Federal and state unemployment tax rate
Required:
1. Record the employee salary expense, withholdings, and salaries payable.
2. Record the employer-provided fringe benefits.
3. Record the employer payroll taxes.
$1,050,000
44,100
22,050
4,200
262,500
6.20%
1.45%
6.20%
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.)
View transaction list
Journal entry worksheet
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Step 1: Explaining the concept of payroll taxes.
VIEWStep 2: Recording the journal entry for salary expense, withholdings and salary payable:
VIEWStep 3: Recording the journal entry for employer provided fringe benefits:
VIEWStep 4: Recording the journal entry for employer payroll taxes:
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