Question

Charlie’s Chocolate Factory Ltd pays its executives on a monthly basis and all other employees on a fortnightly basis. Payroll is processed and paid on the 1st of each month for the executives, and on the 1st and 15th of each month for all other employees. Gross executive salaries per month are $650,000 (less $295,000 tax). Gross wages for all other employees is per month are $750,000 (less $380,000 tax), and paid in equal instalments on the 1st and 15th of each month. On the 15th of the following month the tax is remitted.

Required

Prepare all necessary journal entries for the April payroll (this would include journal entries for transactions which may not occur in April).  

Answer 1

Date	General Journal	Debit	Credit
April 1	Salaries and wages payable ($650000 - $295000)	355000
	Cash		355000
	(To record payment of executive salaries for March)
April 1	Salaries and wages payable [($750000 - $380000)/2]	185000
	Cash		185000
	(To record payment of wages for 2nd fortnight of March)
April 15	Employee taxes withheld ($295000 + $380000)	675000
	Cash		675000
	(To record payment of taxes for March)
April 15	Salaries and wages expense ($750000/2)	375000
	Employee taxes withheld ($380000/2)		190000
	Cash		185000
	(To record wages paid for 1st fortnight of April)
April 30	Salaries and wages expense	650000
	Employee taxes withheld		295000
	Salaries and wages payable		355000
	(To record accrual of executive salaries for April)
April 30	Salaries and wages expense ($750000/2)	375000
	Employee taxes withheld ($380000/2)		190000
	Salaries and wages payable		185000
	(To record accrual of wages for 2nd fortnight of April)