Question

A company has three employees, each of whom has been employed since January 1, earns $3,600 per month, and is paid on the last day of each month. On March 1, the following accounts and balances appeared in its ledger.

1. Employees’ Income Taxes Payable, $1,393.70 (liability for February).
2. EI Payable, $430.27 (liability for February).
3. CPP Payable, $982.58 (liability for February).
4. Employees’ Medical Insurance Payable, $1,960.00 (liability for January and February).

During March and April, the company completed the following related to payroll.

Mar. 17 Issued cheque #320 payable to the Receiver General for Canada. The cheque was in payment of the February employee income taxes, EI, and CPP amounts due.
Mar. 31 Prepared a general journal entry to record the March payroll register, which had the following column totals:

EI		Income Taxes			CPP		Medical Insurance				Total Deductions				Net Pay			Office Salaries				Shop Salaries
$	179.28		$	1,393.70	$	491.29		$	490.00			$	2,554.27			$	8,245.73		$	3,600.00			$	7,200.00

Mar. 31 Recorded the employer’s $490.00 liability for its 50% contribution to the medical insurance plan of employees and 6% vacation pay accrued to the employees.
Mar. 31 Prepared a general journal entry to record the employer’s costs resulting from the March payroll.
Apr. 17 Issued cheque #575 payable to the Receiver General for Canada in payment of the March mandatory deductions.
Apr. 17 Issued cheque #576 payable to All Canadian Insurance Company in payment of the employee medical insurance premiums for the first quarter.

Required:
Prepare the entries to record the transactions. (Round your answers to 2 decimal places. Do not round intermediate calculations.)

Answer 1

JOURNAL ENTRIES
MARCH
Date	Particulars	Dr. Amount	Cr. Amount
Mar-17	Dr. Receiver General for Canada A/C	2806.55
	Cr. Bank		2806.55
	(Amount dues for February - Employees Income Tax $1393.70,
	Employment insurance $430.27 & Canada Pension Plan $982.58
	paid to Receiver General of Canada by Chque #320)
Mar-31	Dr. Monthly Salary - March A/C	8245.73
	Cr. Salary payable A/C		8245.73
	(Net salary payable to 3 employees for the month March.
	Total salary $3600 X 3 = $10800. Less Total Deduction (EI $179.28,
	Income Tax $1393.70, CPP $491.29, Medical Insurance $490 = $2554.27)
Mar-31	Dr. Employment insurance A/C	179.28
	Dr. Income Taxes A/C	1393.7
	Dr. Canada Pension PlanA/C	491.29
	Cr. Receiver General of Canada A/C		2064.27
	(Employment insurance, Income Tax & CPP payable
	to Receiver General of Canada for the month March)
Mar-31	Dr. Employee Medical Insurance Plan A/C	490
	Cr. All Canadian Insurance Company A/C		490
	(Employee's contribution to medical insurance payable to
	All Canadian Insurance Company for the month March)
Mar-31	Dr. Employer's Medical insurance Contribution A/C	490
	Cr. All Canadian Insurance Company A/C		490
	(Employer's contribution to medical insurance payable to
	All Canadian Insurance Company for the month March)
Mar-31	Dr. Vacation payment A/C	648
	Cr. Other Liabilities		648
	(6% vacation payment accrued to exployees and booked in other
	liabilities under current liability (6% of employees monthly total
	salary $10800)
MARCH
Date	Particulars	Dr. Amount	Cr. Amount
Apr-17	Dr. Receiver General for Canada A/C	2064.27
	Cr. Bank		2064.27
	(Amount paid to Receiver Genera for Canada - Employment insurance
	$179.28, Employees Income Tax $1393.70 & Canada Pension Plan $491.29,
	the payment for March by Cheque #575)
Apr-17	Dr. All Canadian Insurance Company A/C	2940
	Cr. Bank		2940
	(Employee Medical insurance paid to All Canadian Insurance company
	for Ist Qarter - January $980, February $980 & March $980 by
	Cheque #576)