Question

Chen’s gross payroll for the work week ending August 16 was $81,000. The company deducted $4,131 for CPP, $1,312 for EI, and $10,210 for income tax from the employees’ pay. Chen’s payroll costs for the week were $4,131 for CPP and $1,837 for EI.

Chen paid payroll on August 23. On August 31, Chen remitted payroll deductions to CRA.

Required

Prepare the journal entries to record the above transactions. Explanations are not required.

Answer 1

FOR THE WEEK ENDING ON AUG 16

EMPLOYEE COST A/C DR   81000

TO CPP PAYABLE A/C 4131

TO EI PAYABLE A/C 1312

TO INCOME TAX PAYABLE A/C 10210

TO EMPLOYEE SALARY PAYABLE A/C 65347

(BEING EMPLOYEE SALARY COST RECOGNISED FOR THE WEEK ENDING AUG 16)

FOR CHENS PAYROLL COST FOR CPP,EI,

EMPLOYEE CPP EXPENSE A/C 4131

EMPLOYEE EI EXPENSES A/C 1837

TO CPP A/C 4131

TO EI PAYABLE A/C 1837

(BEING CPP,EI EXPENSES RECOGNISED)

THIS BELOW ENTRY IS ON AUG 23

EMPLOYEE SALARY PAYABLE A/C DR 65347

TO CASH /BANK A/C 65347

(BEING SALARY PAYMENT FOR THE WEEK MADE)

FOR REMITTANCES ON AUG 31

CPP PAYABLE A/C 8262

EI PAYABLE A/C 3149

TO CASH/BANK A/C 11411

(BEING CPP AND EI REMITTANCES PAID FOR THE WEEK)