Payroll

Test$-1(10\%)$

Gross Pay $$5000$

Income Taxes $$750$

Canada Pension Plan $($CPP$)$ $$62$

Employment Insurance $($EI$)$ $$14$

$1.$ a$.$ Calculate the employee$$s net pay on January $15(4$ points$)$

b$.$ Create the journal entry for the employee$$s pay on January $15.$ Assume that it is paid out immediately to the employee.

$2.$ Calculate the gross pay and net pay for each employee $(3$ points$)$

Employee Hours Hourly Rate Income Tax CPP EI

A$.$Dent $37$ $$14\mathrm{.}35$ $$79\mathrm{.}64$ $$27\mathrm{.}32$ $$9\mathrm{.}76$

H$.$Farnswort h $4012\mathrm{.}8577\mathrm{.}1026\mathrm{.}4312\mathrm{.}64$

P$.$Fry $3913\mathrm{.}5078\mathrm{.}9825\mathrm{.}6511\mathrm{.}54$

L$.$Homeworth $3815\mathrm{.}2586\mathrm{.}9324\mathrm{.}6510\mathrm{.}57$

K$.$Marcelo $2526\mathrm{.}2598\mathrm{.}4428\mathrm{.}338\mathrm{.}89$

Question $3-(3$ Points$)$

Tarantula Publishing prints advertising flyers, booklets and magazines for customers. The company has $12$ employees who work the small printing presses and binding machines. Susan is the bookkeeper and deals with all items relating to the financing recordkeeping of the business. Among her many duties, she prepares all the paperwork for new hires, collects the punch cards from the employees at the end of each pay period and completes and sign the paycheques.

When a new employee is hired, the general manger sends the individual to Susan to complete the appropriate paperwork for payroll. Susan is responsible for properly completing regarding the employees$$ SIN, gross pay and other details.

Susan sometimes has to track down employees to get their time cards so she can pay them. Employees manually fill out the time cards and sometimes take home in their uniforms.

The general manager does not review the pay cheques that Susan writes. He is often too busy dealing with customers and planning the production runs to have time to do much of the paperwork that Susan presents to him

$($continued$)-1$ more page

Since Susan is allowed to sign cheques, she prepares the cheques and hands them out to the employees.

Susan prepares the paycheques manually and is currently using the $2018$ payroll tables to calculation income tax, CPP and El deductions. The $2019$ year has just started, and Susan is unaware that the rates for income tax, CPP and El changes each year. She is still using the $2018$ payroll tables for $2019$ paycheques.

Required

a$)$ What are the consequences of using older payroll tables to calculate payroll deductions?