Sultanaly Company Limited pays its office employees each week. A partial list follows of employees and their payroll data for August. Because August is the vacation period, vacation pay is also listed.
Vacation Pay to Be
Employee Weekly Pay Received in August
Mark Olly .................. $ 450 ......................... $ 900
Bill Ganton .................. 110 ............................ 220
Laurie Evans ................. 250
Louise Bérubé ............. 1,250 .......................... 2,500
Jeff Huziak .................. 480
Assume that the income tax withheld is 10% of wages and that union dues withheld are 1% of wages. Vacations are taken the second and third weeks of August by Olly, Ganton, and Bérubé. The Employment Insurance rate is 1.83% for employees and 1.4 times that for employers. The CPP rate is 4.95% each for employee and employer.
Instructions
(a) Make the journal entries that are necessary for each of the four August payrolls. The entries for the payroll and for the company's payroll tax are made separately.
(b) Make the entry to record the monthly payment of accrued payroll liabilities.
(c) Prepare the entry to accrue the 4% vacation entitlement that was earned by employees in August. (No entitlement is earned on vacation pay.)