Question: Sneed Co provides various fringe benefits for its three employees

Sneed Co. provides various fringe benefits for its three employees. It provides vacation and personal leave at the rate of one day for each month worked. Its employees earn a combined total of approximately $400 per day. In addition, Sneed Co. pays $650 per month in medical insurance premiums for its employees. Sneed also contributes $400 per month into a retirement plan for the employees. The federal unemployment tax rate is .8 percent and the state unemployment tax rate is 4.0 percent on the first $7,000 of earnings per employee.

a. Prepare the monthly journal entry for the accrued fringe benefits.
b. Show the effect of the above transaction on a statements model like the one shown below.

c. If the three employees each worked 250 days, what is Sneed Co.’s total payroll cost (salary, payroll taxes, and fringe benefits) for the year? (Assume that each employee earns $200 perday.)

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  • CreatedOctober 26, 2013
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