The two employees of Silver Co. receive various fringe benefits. Silver Co. provides vacation at the rate of $315 per day. Each employee earns one day of vacation per month worked. In addition, Silver Co. pays a total amount of $650 per month in medical insurance premiums. Silver also contributes a total amount of $400 per month into an employee retirement plan. The federal unemployment tax rate is 6%, while the state unemployment tax rate is 4%. Unemployment taxes apply to the first $7,000 of earnings per employee. Assume a Social Security tax rate of 6% and a Medicare tax rate of 1.5%.

Required
a. Prepare the computation of accrued fringe benefits per month.
b. Show the effect of accrued fringe benefits per month on a horizontal statements model like the one shown next:

c. If the two employees each worked 250 days, what is Silver Co.’s total payroll cost (salary, payroll taxes, and fringe benefits) for the year? (Assume that each employee earns $315 per day.)

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Balance Sheet Statement of Cash Flows Income Statement Llabilities Stk. Equity Assets Varlous Payables Net Inc. Ret. Earn. Exp. Com. Stk. Cash Rev.