Question

978 Question 7: (12 marks) Burlington, Inc. prepared the following payroll summary for the current month: Total salaries $49,500 Employee deductions: Employee income taxes withheld 12,270 Hospital insurance premiums 1,542 Union dues withheld CPP is deducted at 4.95% and El is deducted at 1.73%. Burlington contributes to a private pension plan on behalf of its employees in the amount of 7.5% of gross pay. A vacation pay accrual is also made in the amount of 4% of the gross pay. Required: Prepare the journal entries to record: a) The month's payroll register. b) The cost of employee benefits for CPP and El. c) The cost of employee benefits for the private pension plan and vacation pay.

Answer 1

No.	Account Titles	Debit	Credit
a.	Salary expense	49500.00
	Employee income tax withheld		12270.00
	Hospital insurance premium payable		1542.00
	Union dues withheld		978.00
	CPP payable (4.95% x $49500)		2450.25
	EI payable (1.73% x $49500)		856.35
	Salaries payable/Cash		31403.40
	(To record the month's payroll)
b.	Payroll tax expense	3649.14
	CPP payable		2450.25
	EI payable (1.4 x $856.35)		1198.89
	(To record the cost of employee benefits)
c.	Payroll benefits expense	5692.50
	Vacation pay payable (4% x $49500)		1980.00
	Pension payable (7.5% x $49500)		3712.50
	(To record the cost of employee benefits)