Question 2 (40 marks)

Templeton Company has 2 employees on their payroll.Their personal information is as follows:

Employee #1 Harpreet Singh, 50 years old

Annual Salary $60,000

Married and with a 10-year-old son

Studied part-time at Seneca College for 2 months, and paid tuition fees of $1,500.

Spouse, Emma has $65,000 income

Employee #2 Linda Lavallee, 35 years old

Annual Salary $70,000

Single

Studied full-time at University of Toronto for 4 months, paid tuition fees of $3,500

Linda's 75-year-old mother lives with her. Her mother qualifies for disability tax credit and has no income.

Requireduse the 2018 Ontario Payroll Deduction Guides & the TD1 tax credit formsgo to the CRA website to get this information.

Assume:

1. Both employees have been employed since January 1, 2018.
2. Pay periodSemi-monthly (for example Jan. 2018 is paid on Jan.15, 2018 & Jan.31 2018).

Section A: (20 Marks)

Determine the Federal and Provincial claim codes for income tax deduction purposes for each employee based on the above information.

Hand in: Complete and attach a TD1 tax form for EACH employee. (See attachment 3)

Section B: (20 Marks)

Calculate and prepare the following, for Jan. 2018use worksheets attached for your answer:

1.Gross pay, CPP deduction, EI deduction, Federal Taxes, Ontario Taxes for Harpreet and Linda; (See attachment 4)

2.Payroll Journals for the Company; (See attachment 4)

3.Payroll tax deductions (Company & employee) that will be payable to the CRA by Feb. 15, 2018 (see attachment 4).

4.Journal Entry to record the payroll tax payment to CRA on Feb. 15, 2018. (See attachment 4).