Question
you will be required to calculate the gross to net pay for three employees.You will also be required to calculate other employer costs based on
you will be required to calculate the gross to net pay for three employees.You will also be required to calculate other employer costs based on the information provided.This case study will demonstrate that you know how to use what you have learned in this course.
Majic Corporation sells phone cases to public and private companies.They are located at 123 Locus Rd, Toronto, ON M1H 4S3.They employ 200 full time employees who work in sales, customer service and office support roles.
They have had an annual remuneration of over $1,000,000 for the past several years therefore their EHT rate is 1.95%.
Pay period #1 for those paid bi-weekly started December 22, 2019.
The first pay day for these employees is Friday Jan 10, 2020.
They have three staff in the Customer Service Department answering questions from clients and the general public.
A)
Marijke has been with Majic for 5 years and is the Customer Service Supervisor.She earns $2000.00 bi-weekly working 35 hours per week.
Her employer provides the following:
Health and Dental - fully paid for by the employer at a monthly cost of $469.00
Group Term life insurance - 2x her annual salary at a cost of $0.69 per month per $1000 of coverage
AD&D - $50,000.00 at a cost of $0.19 per month per $1000 of coverage
She has the following personal deductions from her pay:
$5.00 per pay donation to the United Way
Federal and Provincial income tax - she is claiming maximum tax (Claim Code 0) plus an additional $10.00 per pay
Pay Period 3
Answer
Mark
Gross Pay
$2200
/1
Gross taxable income
$162
/1
CPP contributions
$4.31
/1
EI premiums
$1.36
/1
Federal and Provincial taxes
$30.35
/1
Group term life insurance
$13.15
/1
AD & D
$0.3653
/1
United Way
/1
Net pay
$151.63
/1
Employer health tax
$0.814
/1
Total Marks
/10
Pay Period 4
Answer
Mark
Gross Pay
$2200
/1
Gross taxable income
$162
/1
CPP contributions
$4.31
/1
EI premiums
$1.36
/1
Federal and Provincial taxes
$30.35
/1
Group term life insurance
$13.15
/1
AD & D
$0.3653
/1
United Way
/1
Net pay
$151.63
/1
Employer health tax
$0.814
/1
Total Marks
/10
B)
Neema has been with Majic for 3 years and answers calls specifically from clients.
She earns $18.25 per hour and works 35 hours per week and receives overtime per ESA.
Her employer provides the following:
Health and Dental - 50% paid by the employer and 50% paid for by Neema at a cost of $469.00 per month
Group Term life - $50,000.00 at a cost of $0.45 per month per $1000 of coverage
She does not receive AD&D
She has the following deductions:
Federal and Provincial taxes - she is claiming basic tax (Claim code 1) plus an additional $5.00 per pay
Calculate the following for Neema:
Pay Period 3
Answer
Mark
Gross Pay
/1
Gross taxable income
/1
CPP contributions
/1
EI premiums
/1
Federal and Provincial taxes
/1
Health and Dental Cost
/1
Group term life insurance
/1
Net pay
/1
Employer health tax
/1
Total Marks
/9
Pay Period 4
Answer
Mark
Gross Pay
/1
Gross taxable income
/1
CPP contributions
/1
EI premiums
/1
Federal and Provincial taxes
/1
Health and Dental Cost
/1
Group term life insurance
/1
Net pay
/1
Employer health tax
/1
Total Marks
/9
C)
Roger started with Majic this year.His first day was January 6, 2020.He was hired on a temporary basis to cover an employee who was off on maternity leave.He earns $16.50 per hour.He is covered under the Employment Standards Act of Ontario. He works 7 hours per day and receives 4% vacation pay on each pay cheque.He does not receive any benefits.He has not taken any days off and received stat pay for the following holidays:
Family day he received 7.28 hours of stat
Good Friday he received 7.28 hours of stat
Victoria Day he received 7.28 hours of stat
He has the following deductions:
Federal and Provincial taxes - he is claiming basic tax (Claim code 1)
He has found a full time job and his last day to work will be June 26, 2019
Pay Period 3
Answer
Mark
Gross Pay
/1
Gross taxable income
/1
CPP contributions
$2
/1
EI premiums
$1
/1
Federal and Provincial taxes
$464
/1
Net pay
$1326
/1
Employer health tax
$0.47
/1
Total Marks
/7
Pay Period 4
Answer
Mark
Gross Pay
$1617
/1
Gross taxable income
$1226
/1
CPP contributions
$3
/1
EI premiums
$1
/1
Federal and Provincial taxes
$464
/1
Net pay
$1686
/1
Employer health tax
$0.59
/1
Total Marks
/7
D)
Now that you have calculated the net pays for each of these employees, calculate the totals for all three for following:
Pay Period 3
Answer
Mark
Total Gross earnings for all 3 employees
/1
Total employee portions for CPP
/1
Total employer portions for CPP
/1
Total employee portions for EI
/1
Total employer portions for EI
/1
Total Federal and Provincial taxes
/1
Total employee portion of Health benefits
/1
Total employer portion of Health benefits
/1
Total for United Way
/1
Total EHT
/1
Total Marks
/10
Pay Period 4
Answer
Mark
Total Gross earnings for all 3 employees
/1
Total employee portions for CPP
/1
Total employer portions for CPP
/1
Total employee portions for EI
/1
Total employer portions for EI
/1
Total Federal and Provincial taxes
/1
Total employee portion of Health benefits
/1
Total employer portion of Health benefits
/1
Total for United Way
/1
Total EHT
/1
Total Marks
/10
E)
Journal Entries for Pay Period 3 and 4
Using the grid below complete the journal entry for the month of February using the amounts you calculated in Section D.
Account
Debit
Credit
Mark
Wage Expense
/1
CPP Expense
/1
CPP Payable
/1
EI Expense
/1
EI Payable
/1
Fed & Prov tax payable
/1
Health expense
/1
Health payable
/1
United Way payable
/1
Net Pay
/1
Total
/1
Total Marks
/11
F)
As previously mentioned Roger has decided to leave Majic.His last day worked will be June 28th.He will require a Record of Employment.
Complete the boxes below with the correct amounts that should be included in each of the sections.
Box
Amount
Mark
Box 10
/1
Box 11
/1
Box 12
/1
Box 14
/1
Box 15 A
/1
Box 15 B
/1
Box 16
/1
Box 22
/1
Total Marks
/8
G)
Year End
In this question you will need to complete the boxes for a T4 for Marijke using some of the following information.Enter your answers in the grid provided below the copy of the T4.This would be her 2019 T4.
1.Gross earnings = $50700.00
2.Her taxable benefit for Group term life insurance was $81.50
3.Her taxable benefit for AD&D was $16.25
4.Her employer paid Health and Dental was $440.00
5.Her Taxes were $8825.33
6.Her donations to a charity were $104.00
7.You will need to calculate her CPP and EI deductions using 2019 rates.The 2019 rate for CPP is 5.1% and EI is 1.62%.
Description
Answer
Mark
Company
/1
Year
/1
Box 10 Province of Employment
/1
Box 14 Employment Income
/1
Box 16 Employee's CPP contributions
/1
Box 18 Employee's EI premiums
/1
Box 22 Income Tax deducted
/1
Box 24 EI insurable earnings
/1
Box 26 CPP/QPP pensionable earnings
/1
Box 46 Charitable Donations
/1
Other Information Code 40 Other Taxable Allowances and Benefits
/1
Total Marks
/11
Part D
WSIB - In the boxes provided please include the frequency of the WSIB payment and the date it would be due.
Assessable Earnings
Frequency of Payment
Due Date
Mark
$65,400.00
/2
$551,500.00
/2
$103,600.00
/2
$1,395,200.00
/2
$2654.00
/2
Total Marks
/10
Total Marks
/150
Grade Percentage - 30% of final grade
%
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Accounting
Authors: Peter J Eisen
6th Edition
143800138X, 978-1438001388
