During January, Luxury Cruise Lines incurs employee salaries of $1.9 million. Wi

Question

During January, Luxury Cruise Lines incurs employee salaries of $1.9 million. Withholdings in January are $145,350 for the employee portion of FICA, $285,000 for federal income tax, $118,750 for state income tax, and $19,000 for the employee portion of health insurance (payable to Blue Cross/Blue Shield). The company incurs an additional $117,800 for federal and state unemployment tax and $57,000 for the employer portion of health insurance.

Record the necessary entries in the Journal Entry Worksheet below. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Enter your answers in dollars, not in millions.)

During January, Luxury Cruise Lines incurs employee salaries of $1.9 million. Withholdings in January are $145,350 for the employee portion of FICA, $285,000 for federal income tax, $118,750 for state income tax, and $19,000 for the employee portion of health insurance (payable to Blue Cross/Blue Shield). The company incurs an additional $117,800 for federal and state unemployment tax and $57,000 for the employer portion of health insurance.

Explanation / Answer

Debit Salaries Expense $1,900,000
Credit FICA Payable $145,350
Credit Federal Income Tax Withholding Payable $285,000
Credit State Income Tax Withholding Payable $118,750
Credit Health Insurance Payable $19,000
Credit Salaries Payable $1,331,900

Debit Payroll Tax Expense $320,150
Credit FICA Payable $145,350
Credit Unemployment Taxes Payable $117,800
Credit Health Insurance Payable $57,000

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