ACC402 Lecture Notes - Lecture 6: Current Liability, Canada Revenue Agency, Unemployment Benefits
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Required:
1. Enter the appropriate information in a payroll register.
2. Record the payroll information in a general journal, crediting netpay to cash
Assume that payroll records of a branch of indigo Books providedthe following information for the weekly pay period ended December18, 2012:
Employee Lucy Bourdon Maura Wells Carl Boyd Maurice Lamont
Hoursworked 45 50 49 40
40- hours weeklyearnings $440 $500 $850 $380
IncomeTax $62.85 $73.25 $184.10 $42.60
Canada PensionPlan $22.53 $30.70 $0.00 $15.48
Employmentinsurance $9.56 $12.58 0 $6.95
UnitedWay $16 $16 $40 $4
Earnings at end of previousweek) $19,130 $28,400 $56,380 $8966
Lucy Bourdon and Maurice Lamont work in the office, and MauraWells and Carl Boyd are sales staff. All employees are paid timeand a half for hours worked in excess of 40 hours per week. Showcomputations.
Payroll Register | |||||||||||||
GROSS PAY | DEDUCTIONS | NET PAY | ACCOUNT DEBITED | ||||||||||
EMPLOYEE NAME | HRS | STRAIGHT-TIME | OVER-TIME | TOTAL | INCOME TAX | CANADA PENSION PLAN | EMPLOY-MENT | UNITED WAY | TOTAL | AMOUNT | CHQ. NO. | OFFICE SALARIES EXPENSE | SALES SALARIES EXPENSE |
Computations:
Req. 2
General Journal | |||||
DATE | ACCOUNT TITLES AND EXPLANATIONS | POST. REF. | DEBIT | CREDIT | |
On January 8, the end of the first weekly pay period of the
year, Royal Company's payroll register showed that itsemployees
earned $21,760 of office salaries and $60,840 of salessalaries.
Withholdings from the employees' salaries include FICASocial
Security taxes at the rate of 6.20%, FICA Medicare taxes atthe
rate of 1.45%, $13,560 of federal income taxes, $1,340 ofmedical
insurance deductions, and $880 of union dues. No employeeearned
more than $7,000 in this first period.
1.1 Calculate FICA Social Security taxes payable andFICA
Medicare taxes payable by the employees of RoyalCompany.
FICAââ¬âSocial sec. taxes payable | $ |
FICAââ¬âMedicaretaxes payable | $ |
1.2 | Prepare the journal entry to recordRoyal Company's January 8 (employee) payroll expenses andliabilities. (Roundyour answers to 2 decimal places. Omit the "$" sign in yourresponse.) |
Date | General Journal | Debit | Credit |
Jan. 8 | |||
2. | Prepare the journal entry to recordRoyal's (employer) payroll taxes resulting from the January 8payroll. Royal's merit rating reduces its state unemployment taxrate to 6% of the first $7,000 paid each employee. The federalunemployment tax rate is 0.8%. (Round your answers to 2decimal places. Omit the "$" sign in your response.) |
Date | General Journal | Debit | Credit |
Jan. 8 | |||