Reference no: EM132810237

Gray, Inc. prepared the following payroll summary for the current month:

Administrative salaries $20,000

Sales salaries 10,000

Shop wages 19,000

Employee deductions

Federal income taxes withheld 12,500

Hospital insurance premiums 1,500

Union dues 1,200

Canada Pension Plan is 4.95 percent of the pensionable earnings with an annual exemption of $3,500 for each employee. Employment Insurance is 1.78 percent of the insurable earnings. None of the current month's salaries and wages exceed the CPP or EI limits. Gray, Inc. makes a pension contribution equal to 9% of each employee's gross earnings. A vacation pay accrual is also made at 3.6% of the gross earnings. Gray, Inc. has 15 employees.

Problem 1: Prepare the journal entries to record:

(A) The month's payroll accrual.

(B) The month's employer payroll taxes.

(C) The employer's pension contribution and vacation pay accrual.