Answer:
1. Salary expense = $2,300,000
Withholdings = $494,500
Salary payable = $1,805,500
2. Total fringe benefits = $185,150
3. Payroll tax = $494,500
Explanation:
1. Employee salary expense is given as $2,300,00
Withholdings is given as $494,500. This is the sum total of federal and state FICA taxes and unemployment tax.
Salaries payable is employee salary expense less withholdings.
Salaries payable = 2,300,000 - 494,500
= $1,805,500
2. Employer-provided fringe benefits includes medical insurance, dental insurance, life insurance and voluntary retirement plan contribution. The corporation matches employee contributions to a voluntary retirement plan up to 6% of their salaries and employee contribution to voluntary retirement plan is $115,000. Since this amount is 5% of salaries, the corporation will contribute an equal amount.
Medical insurance premiums paid by employer = $46,000
Dental insurance premiums paid by employer = $16,100
Life insurance premiums paid by employer = $8,050
Employer contribution to voluntary retirement plan = $115,000
Total fringe benefits = $185,150
3. Employer payroll taxes includes Federal and state FICA taxes and unemployment tax.
Federal FICA tax (rate of 7.65%) = (7.65/100) * 2300000 = $175,950
State FICA tax (rate of 7.65%) = (7.65/100) * 2300000 = $175,950
Unemployment tax (rate of 6.20%) = (6.20/100) * 2300000 = $142,600
Total pay roll tax = 175950 + 175950 +142600
= $494,500
