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Blue Jeans Company provides retirement benefits to employees through defined contribution plan. The plan provides that Blue Jeans shall contribute annually 8% of gross payroll to a funding agency. In addition, the entity is also required to contribute 5% off annual sales exceeding P10,000,000. During 2018, gross payroll of the company was P6,000,000 and total sales amounted to P35,000,000.
Requirement:
Question 1: Determine the retirement benefit expense for the year 2018
Question 2: Entry to record the contribution to the fund and the retirement benefit expense assuming the following contributions P1,800,000 and P1,500,000
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