1. The payroll of Burton Inc. for March 2018 is as follows. Total payroll was $485,000....

1. The payroll of Burton Inc. for March 2018 is as follows. Total payroll was $485,000. Pensionable (CPP) and insurable (EI) earnings were $365,000. Income taxes in the amount of $85,000 were withheld, as were $8,000 in union dues. The EI 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.

(a) Prepare the necessary journal entries to record the payroll if the salaries and wages paid and the employer payroll taxes are recorded separately. [2 Marks]

(b) Prepare the entries to record the payment of all required amounts to the Receiver General. [2 Marks]

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

Expert Solution

Employee Benefit costs
Particulars	Debit	Credit
Salaries expenses	485,000.00
Emploment insurance tax payable (365,000*1.88%)		6,862.00
Employees income tax payable		85,000.00
CPP tax payable (365,000*4.95%)		18,067.50
Employee's union due payable		8,000.00
Salary payable		367,070.50
(To record payroll & payroll deduction)

Employer Contributions To CPP &EI
Payroll taxes expenses	27,674.30
Employment insurance tax payable (365,000*2.632%)		9,606.80
CPP Tax payable (365,000*4.95%)		18,067.50
(To record employer's payroll taxes)

Employment insurance taxes payable (6,862+9,606.8)	16,468.80
Employee income tax payable	85,000.00
CPP taxes payable	36,135.00
Employee union due payable	8,000.00
Cash		1,45,603.8
(To record the payment of all required amt to the receiver general & employee union)

Salaries & wages that flounder commits to pay (A)	485,000.00
actual payroll cost to the company (include employer share) (485,000 + 27,674.3) (B)	512,674.30
Ratio (A/B)	1.06

Note: Amounts are rounded off to 2 decimals

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