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.

1)

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

Solution:

Parental Benefit Program to Zeinab

Starting Month of Maternity Leave =November, 2020

Ending Month of Maternity Leave=April,2022 (18 months)

Salary for the year =$52520 for 1st 12 months

Salary for Week =$52520/52= $1010 per week

Salary for next 6 months at 70% of salary=$52520 x 70% for 6 months=$18382 or

Salary for week=$18382/26=$707

1. Journal Entries

Date	Account Titles	Debit	Credit
01-11-2020	Employee Benefit Expense	4040
	To Employee Benefit Expenses Payable		4040
	(To Record employee benefit Expense for Nov 2020)
01-12-2020	Employee Benefit Expense	4040
	To Employee Benefit Expenses Payable		4040
	(To Record employee benefit Expense for Dec 2020)
01-01-2021	Employee Benefit Expense	49894
	To Employee Benefit Expenses Payable		49894
	(To Record employee benefit Expense for 2021)
01-01-2022	Employee Benefit Expense	12255
	To Employee Benefit Expenses Payable		12255
	(To Record employee benefit Expense for 2022)
1st week of nov 20	Employee Benefit Expenses Payable A/c	1010
	To Bank A/c		1010
	(To record weekly payment of Employee Benefit Expenses)
1st week of nov 21	Employee Benefit Expenses Payable A/c	707
	To Bank A/c		707
	(To record weekly payment of Employee Benefit Expenses)
1st week of Jan-22	Employee Benefit Expenses Payable A/c	707
	To Bank A/c		707
	(To record weekly payment of Employee Benefit Expenses)

2.

Payment Schedule

Month	Payment $ /Month
Nov-20	4376.667
Dec-20	4376.667
Jan-21	4376.667
Feb-21	4376.667
Mar-21	4376.667
Apr-21	4376.667
May-21	4376.667
Jun-21	4376.667
Jul-21	4376.667
Aug-21	4376.667
Sep-21	4376.667
Oct-21	4376.667
Nov-21	3063.667
Dec-21	3063.667
Jan-22	3063.667
Feb-22	3063.667
Mar-22	3063.667
Apr-22	3063.667
Total	70902

2. As per the above payment schedule,

Particulars	2020	2021
Parental Leave Benefits Payable	49894	12255

Particulars	2020	2021
Current Liability (Payable within next 12 months)	49894	12255
Long-Term Liability (Payable beyond 12 months)	12255	0