Reference no: EM132807121

The following totals for the month of April were taken from the payroll register of Liu Corp.:

Gross salaries........................................ $26,850
CPP withheld.............................................. 1,330
Employee income taxes withheld............... 5,785
Medical insurance deductions....................... 930
EI withheld..................................................... 478
Union dues withheld...................................... 446

Problem 1: The journal entry to record the accrual of the employee's portion of Canada Pension Plan (CPP) would include a:

(a) debit to CPP Payable of $1,330.
(b) debit to CPP Expense of $1,330.
(c) credit to Employee Benefits Expense of $1,330.
(d) credit to CPP Payable of $1,330.

Problem 2: Under IFRS, if a company can determine a reasonable estimate of an expected loss from a lawsuit and it is probable it will lose the lawsuit, it should:

(a) disclose the basic facts regarding the lawsuit in the notes to its financial statements.
(b) record the loss.
(c) neither disclose in the notes nor record the loss.
(d) pay the amount estimated.