Question

Bridgeport Corporation offers enriched parental benefits to its staff. While the government provides compensation based on Employment Insurance legislation for a period of 12 months, Bridgeport increases the amounts received and extends the period of compensation. The benefit program tops up the amount received to 100% of the employee’s salary for the first 12 months, and pays the employee 70% of his or her full salary for another 6 months after the EI payments have stopped.

Zeinab Jolan, who earns $52,520 per year, announced to her manager in early June 2020 that she was expecting a baby in mid-November. On October 29, 2020, 9 weeks before the end of the calendar year and Bridgeport’s fiscal year, Zeinab applied for and began her 18-month maternity leave. Assume that the Employment Insurance program pays her a maximum of $720 per week for 52 weeks.

For the purpose of this question, ignore any tax, CPP, and EI deductions when making payments to Zeinab.

Prepare all entries that Bridgeport Corporation must make during its 2020 fiscal year related to the parental benefits plan in regard to Zeinab Jolan. (Round answers to decimal places, e.g. 5,275. Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter O for the amounts.) Date Account Titles and Explanation Debit Credit (To record employee benefit expense) (To record payment of parental leave benefits for one week)

2) Prepare one entry to summarize all entries that the company will make in 2021 relative to Zeinab Jolan’s leave. (Round answers to 0 decimal places, e.g. 5,275. Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.)

3)

Answer 1

1. Weekly salary of employee = 52520/52 =$1010 per week

Government compensates = $720

Cost to company for first 12 month = $1010-$720 =$290 per week

Cost to company for next 6 months =70% of $1010 per week   = $707

Total Employee benefits payable = 290*52 + 707*26 = $33462

Employee benefit payable in 2020 = 290*9 =$2610

Employee benefit payable in 2021 =290*43 +707*9 =18833

Employee benefit payable in 2022 = 707*17 =12019

Date	particulars	Amount	Amount
31st dec 2020	Employee benefit expense a/c dr	33462
	To Employee benefits payable a/c		33462
	( Being maternity leave expense booked for maternity leave period)
31st dec 2020	Employee benefits payable a/c	2610
	To cash		2610
	(Being maternity leave expense paid for 2020)

It has been assumed that government compensation is directly paid to employee.

2.Employee benefit payable in 2020 = 290*9 =$2610

Employee benefit payable in 2021 =290*43 +707*9 =18833

Particulars	2020	2021
Current liability	18833	12019
Long term liability	12019	0

Current liability is liability payable within 12 months