Question

Bramble Inc.’s weekly payroll of $27,000 included employee income taxes withheld of $4,015, Canada Pension Plan (CPP) withheld of $1,162, and Employment Insurance (EI) withheld of $540. Assume now that the employer is required to match every dollar of the CPP contributions of its employees and to contribute 1.4 times the EI withholdings.

(a)

Prepare the journal entry to record Bramble’s payroll-related expenses. (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

Answer 1

Salaries expense	27000
Employee benefits expense (1162+(540*1.4))	1,918
Income tax payable		4,015
Canada Pension Plan (CPP) payable		2,324
Employment Insurance (EI) payable		1,296
Cash (balancing figure)		21,283
(To record payroll-related expenses)

Employee benefits expense = Employer's contrition to CPP + EI

=1162+(540*1.4)

=1,918

CPP payable :

= Employee's contribution + Employer's contribution

=1162+1162

=2,324

EI payable :

= Employee's contribution + Employer's contribution

= 540 + (540*1.4)

=1,296

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