Question

(I need the answer as soon as possible . Please !!!)

College Max’s gross payroll for Feb 16-28 was $435,000. The company deducted $22,838 for CPP, $6,873 for EI, and $87,261 for income tax from the employees’ pay. College Max’s payroll costs for the period were $22,838 for CPP and $9,622 for EI.

College Max paid payroll on March 6. On March 15, College Max remitted payroll (source) deductions to CRA.

Required

Prepare the journal entries to record the above transactions. Explanations are not required.

Answer 1

Jounal entries are as under:

1st Entry on 01/03:

Payroll/ Salary Expense A/c.............Dr 318,028

CPP A/c...........................................Dr 22,838

EI A/c...............................................Dr 6,873

Income Tax A/c................................Dr 87,261

To Salary/Payroll Payable A/c ................................................ 435,000

(Being the salary/payroll expense booked assuming the date would be on 01/03)

2nd Entry on 06/03

Salary/Payroll Payable A/c.......................Dr 318,028

To Bank A/c................................................................................318,028

(Being the salary/Payroll expense paid to employees)

3rd Entry on 15/03

Salary payabe A/c................................Dr 116,972

To Bank A/c............................................................................. 116,972

(Being the deducted amounts transferred to CRA )