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Problem - Willamette Manufacturing estimated that its total payroll for the coming year would be $650,000. The workers' compensation insurance premium rate is 0.3%.
Required -
1- Calculate the estimated workers' compensation insurance premium and prepare the journal entry for the payment as of January 2, 20--.
2- Assume that Willamette Manufacturing's actual payroll for the year was $672,000. Calculate the total insurance premium owed and prepare a journal entry as of December 31, 20--, to record the adjustment for the underpayment. The actual payment of the additional premium will take place in January of the next year.
3- Assume instead that Willamette Manufacturing's actual payroll for the year was $634,000. Prepare a journal entry as of December 31, 20--, for the total amount that should be refunded. The refund will not be received until the next year.
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