Reference no: EM133496918

Question: XYZ Ltd employs its staff on a five-day work week, with employees being paid on Fridays. The weekly salaries expense is $12,000, and employees are paid in arrears. When the employees are paid, the salaries paid are for work performed in the preceding week. Thruster Ltd retains $3,500 per week to pay the Australian Taxation Office for PAYG tax on behalf of the employees. This is paid on the following Monday of each week. It also retains $700 per week to pay staff premiums to the Oceanic Medical Benefits Fund. Required: If we assume that the reporting date falls on a Thursday, what would the accounting entry at reporting date be to recognise four days' salary and wages expense? What would be the journal entry on when the wages are ultimately paid? What would be journal entry when the tax and medical benefits are paid to respective organisations?