Question

The payroll of Sarasota Corp. for September 2017 is as follows. Total payroll was $458,000. Pensionable (CPP) and insurable (EI) earnings were $308,000. Income taxes in the amount of $90,000 were withheld, as were $7,700 in union dues. The Employment Insurance tax rate was 1.88% for employees and 2.632% for employers, and the CPP rate was 4.95% for employees and 4.95% for employers.

Prepare the necessary journal entries to record the payroll if the salaries and wages paid and the employer payroll taxes are recorded separately.

Prepare the entries to record the payment of all required amounts to the Receiver General and to the employees’ union.

For every dollar of salaries and wages that Sarasota commits to pay, what is the actual payroll cost to the company?

Answer 1

Answer

EMPLOYEE (FRINGE) BENEFIT COSTS Debit Credit Salaries Expense Emplo Employees' Income tax payable Canada Pension Plan taxes pavable Employees' Union Dues Payable Salaries Pavable 458,000.00 ent Insurance taxes pavable 308000*1.88% 5,790.40 90,000.00 15,246.00 7,700.00 339,263.60 308000*4.95% (To record payroll and payroll deductions for pay period ending Sept 17) Emplover Contributions to CPP & EI Debit Credit Payroll taxes expense Emplo Canada Pension Plan taxes pavable (To record employer's payroll taxes relating to the Sept payroll) 23,352.56 ent Insurance taxes pavable 8,106.56 15,246.00 308000*2.632% 308000*4.95% Debit Credit Emplovment Insurance taxes payable Employees' Income tax payable Canada Pension Plan taxes pavable Employees' Union Dues Payable Cash (to record the payment of all required amounts to the Receiver General and to the employees' union 13,896.96 90,000.00 30,492.00 7,700.00 142,088.96 salaries and wages that Sarasota commits to actual Ratio 458,000.00 roll cost to the company 481,352.56 (including employer's share) 1.05