The following information relates to Ponte Manufacturing Companys workers compensation insurance premiums for 2016. On January 15,

The following information relates to Ponte Manufacturing Company’s workers’ compensation insurance premiums for 2016. On January 15, 2016, the company estimated its premium for workers’ compensation insurance for the year on the basis of that data.

INSTRUCTIONS
1. Compute the estimated premiums.
2. Record in general journal form payment of the estimated premium on January 15, 2016. Use 8 as the page number.
3. On January 4, 2017, an audit of the firm’s payroll records showed that it had actually paid wages of $69,960 to its office employees and wages of $315,320 to its shop employees. Compute the actual premium for the year and the balance due the insurance company or the credit due the firm.
4. Prepare the general journal entry on December 31, 2016, to adjust the Workers’Compensation Insurance Expense account. Use 98 as the page number.
Analyze: If all wages were attributable to shop employees, what premium estimate would have been calculated and recorded on January 15,2016?

Transcribed Image Text:

Amount of Estimated Wages S 64,000 308,000 Work Insurance Rates Classification Office work Shop work $0.30/S100 $6.00/$100