Question

Practical Question Birch Company has 5 sales employees, each of whom earns $2,500 per month and is paid the last working day of the month. CPP is 5.25% and EI is 1.58%. Withholdings for the employees also include federal and provincial income tax of $2,800 (total for all five), medical insurance premiums of $210 for each employee, union dues of $6 per employee and contribution to the United Way of $60 total from all employees. 1) Prepare the general journal entry to accrue the payroll on March 31. 2) Prepare the general journal entry to record Birch Company's payroll tax expense for March. 3) Prepare a separate entry general journal entry to record the remittance to the:

a. CRA;

b. insurance company;

c. union; and

d. charitable organization

Answer 1

No.	Account Titles	Debit	Credit
1	Salary expense (5 x $2500)	12500.00
	CPP payable (5.25% x $12500)		656.25
	EI payable (1.58% x $12500)		197.50
	Employee income tax withheld		2800.00
	Health insurance payable (5 x $210)		1050.00
	Union dues payable (5 x $6)		30.00
	United Way contribution payable		60.00
	Salaries payable		7706.25
	(To record accrual of payroll)
2	Payroll tax expense	932.75
	CPP payable (5.25% x $12500)		656.25
	EI payable (1.58% x $12500 x 1.4)		276.50
	(To record payroll tax expense)
3a.	CPP payable ($656.25 + $656.25)	1312.50
	EI payable ($197.50 + $276.50)	474.00
	Employee income tax withheld	2800.00
	Cash		4586.50
	(To record the remittance to the CRA)
3b.	Health insurance payable	1050.00
	Cash		1050.00
	(To record the remittance to the insurance company)
3c.	Union dues payable	30.00
	Cash		30.00
	(To record the remittance to the union)
3d.	United Way contribution payable	60.00
	Cash		60.00
	(To record the remittance to thecharitable organization)