Question

Exercise 13-13 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 72% of his or her full salary for another 6 months after the EI payments have stopped. Zeinab Jolan, who earns $54,600 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. Your answer is partially correct. Try again. 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 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.) Date Account Titles and Explanation Debit Credit Oct. 29Dec. 31 (To record employee benefit expense) (To record payment of parental leave benefits for one week) SHOW LIST OF ACCOUNTS LINK TO TEXT Your answer is incorrect. Try again. 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.) Account Titles and Explanation Debit Credit SHOW LIST OF ACCOUNTS LINK TO TEXT Your answer is incorrect. Try again. Calculate the amount of parental benefits payable at December 31, 2020, and 2021. (Round answers to 0 decimal places, e.g. 5,275.) 2020 2021 Parental Leave Benefits Payable $ $ Explain how these amounts will be shown on Bridgeport’s SFP. (Round answers to 0 decimal places, e.g. 5,275.) 2020 2021 Current liability $ $ Long-term liability $ $ SHOW LIST OF ACCOUNTS LINK TO TEXT Question Attempts: 2 of 5 used SAVE FOR LATER SUBMIT ANSWER

Answer 1

1. Journal for Fiscal year 2020

Date	Journal
31st Dec	Employee benefit expense A/c …………..Dr	15930
	To Employee benefit payable A/c.….Cr		15930
	(Being maternity expenses payable for fiscal year 2021 to be paid to Zeinab)

Working note -

Calculation of expenses payable for fiscal year 2020
	Weeks	Amount ($)	Payable
Benefit payable under emplyee insurance program	9	720	6480
Payment under Enriched parental benefit	9	1050	9450
			15930

Zeinab salary per week

54600/52

1050

2. Parental benefit payable for fiscal year 2021

Journal
Employee benefit expense A/c …………..Dr	82914
To Employee benefit payable A/c.….Cr		82914
(Being maternity expenses payable for fiscal year 2021 to Zeinab)

Working note-

Calculation of expenses payable for fiscal year 2021
	Weeks	Amount	payable
Benefit payable under emplyee insurance program	43	720	30960
Payment under Enriched parental benefit	43	1050	45150
Extended benefit under enriched parental benefit policy post 12 months	9	756 (1050*72%)	6804
			82914

3. Extract of Bridgeport's SFP for fiscal year 2020 & 2021

	2020	2021
Current liability	15930	82914
Long - Term liability	0	0