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The employer pays 60% of the cost of medical insurance and 60% of the cost of medical insurance for its employees. (As presented in class, economists tell us that this is for legal purposes only. In actuality, employees have to receive lower money income for everything the employer pays on behalf of the employee, because the employer can afford to pay only so much for labor.)

Sales salaries earned by sales personnel 200,000 Office salaries earned by office personnel 160,000 Federal income tax withheld from all employees combined 90,000 State income tax withheld from all employees combined 20,000 Social Security (FICA) tax withheld from all employees combined 22,320 Medicare tax withheld from all employees combined 5,220 Employee portion of medical insurance, withheld from all employees combined 7,000 Employee portion of life insurance, withheld from all employees combined 4,000 Union dues deducted from employee pay for those who are union members 1,000

Salaries subject to federal and state unemployment taxes are $50,000. Assume that the SUTA tax rate is 5.4% and the FUTA tax rate is 0.6%.

Required:

Make the correct journal entries for

Part a. (ten points) recording the accrued payroll, including deductions from employees gross pay. If no journal entry should be made, explicitly say that no journal entry should be made.

Part b. (four points) paying the net payroll to employees. If no journal entry should be made, explicitly say that no journal entry should be made.

Part c. (twelve points) accruing employer portion of FICA, SUTA, and FUTA taxes. Assume that the employer portion of FICA is exactly equal to what was withheld from employees. If no journal entry should be made, explicitly say that no journal entry should be made.

Part d. (four points) accruing employer portion of fringe benefits (medical insurance and life insurance). If no journal entry should be made, explicitly say that no journal entry should be made.

Part e. (four points) payment of each of the federal and state depositaries for taxes mentioned above. If no journal entry should be made, explicitly say that no journal entry should be made.

Part f. (four points) payment of the total amount(s) due to the insurance company or companies providing the medical insurance and life insurance coverage. If no journal entry should be made, explicitly say that no journal entry should be made.

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