Question

The total payroll of Apple Inc. was $500,000. Income taxes withheld were $155,000. The Canada Pension Plan (CPP) contributions are 4.93% for both the employee and employer. The Unemployment Insurance (EI) rate is 1.86% for the employee and 1.45 times the employee rate for the employer.

Required (round all values to the nearest dollar, if necessary)

1. Prepare the journal entry for the wages and salaries paid.

b)    Prepare the entry to record the employer payroll taxes.

Answer 1

a.)	Account Titles	Debit $	Credit $
	Salaries & wages expense	500,000
	Income Tax Withholding		155,000
	CPP Contribution payable (500,000 x 4.93 % )		24,650
	Unemployment Insurance (EI) payable		9,300
	(500,000 x 1.86% )
	Cash		311,050
b.)	Account Titles	Debit $	Credit $
	Payroll Tax Expense	38,135
	CPP Contribution payable (500,000 x 4.93 % )		24,650
	Unemployment Insurance (EI) payable		13,485
	(500,000 x 1.86% x 1.45 )