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Prepare the necessary journal entries to record the payroll

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Q1. Bridgeport Corporation offers parental benefits to its staff as a top-up on EI benefits so that employees end up receiving 100% of their salary for 12 months of parental leave. Ruzbeh Awad, who earns $75,400 per year, announced that he will be taking parental leave for a period of 17 weeks starting on December 1, 2020. Assume that the Employment Insurance program pays him a maximum of $710 per week for the 17 weeks. Find the entries that Bridgeport Corporation must make during its 2020 fiscal year related to the parental benefits plan as it applies to Ruzbeh Awad. For the payment entry, ignore withholding taxes, CPP, and EI.

Q2. The payroll of Pronghorn Corp. for September 2020 is as follows. Total payroll was $460,000. Pensionable (CPP) and insurable (EI) earnings were $310,000. Income taxes in the amount of $95,000 were withheld, as were $7,146 in union dues. The Employment Insurance tax rate was 1.66% for employees and 2.324% for employers, and the CPP rate was 4.95% for employees and 4.95% for employers.

a. Prepare the necessary journal entries to record the payroll if the salaries and wages paid and the employer payroll taxes are recorded separately.

b. Prepare the entries to record the payment of all required amounts to the Receiver General for Canada and to the employees' union.

c. For every dollar of salaries and wages that Pronghorn commits to pay, what is the actual payroll cost to the company?

Reference no: EM132676935

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