1.

Southern Manufacturing Company

The following payroll summary is prepared for the Southern Manufacturing Company for the week ending Mar
Direct labor:
Job No. 200 P103,000
Job No. 201 70,000
Job No. 202 65,000
Total direct labor P238,000
Indirect labor 62,000
Total gross payroll P300,000

Payroll taxes and insurance are to be computed as follows:

Employee's Employer's
Share Share
Income tax withheld 10%
Pension Fund 2.00%
Pag-ibig Contribution 2.00% 2.00%
PhilHealth 1.25% 1.25%
SSS Contribution 2.5% 3.25%
Employee's compensation insurance 1.00%

Prepare the general journal entries to:

a. Record the payroll.
b. Pay the payroll.
c. Distribute the payroll to the appropriate accounts.
d. Record the employer's share of payroll expense. (All of the employees work in the factory.)

Answers:
a. Payroll P 300,000
Withholding Taxes Payable P 28,275
Pag-ibig Premium Payable 6,000
Philhealth Premium Payable 3,750
SSS Premium Payable 7,500
Wages Payable 254,475

b. Wages Payable P 254,475

Cash P 254,475

c. Work in Process P 238,000

Factory Overhead 62,000
Payroll P 300,000

d. Factory Overhead P 28,500

Pension Fund Payable P 6000
Pag-ibig Premium Payable 6000
Philhealth Premium Payable 3750
SSS Premium Payable 9750
Insurance Payable 3000
ny for the week ending March 29, 2018:

in the factory.)
2. Jay See
Jay See is paid P100 an hour for 40 hours a week, with time-and-a-half for overtime and double-time
for Sundays and holidays. Overtime premium is charged to Factory Overhead.
Using the labor-time record below:
a. Compute Jay’s total earnings for the week.
b. Present the journal entry to distribute Jerrod’s total earnings.

Withholding -Tax 10%; SSS – 2%; Pag-ibig- 1%; Philheal-1%

Sun Mon Tues Wed Thur Fri Sat Total

J-F28 4 4 4 4 4 4 4 28
J-M14 3 2 4 6 15
Admin 1 2 4 7
Total 4 8 8 8 8 10 4 50

Answers:
a. Regular pay P 3300
Overtime 900
Double pay 800
Administrative Salaries 700
Jay’s total earnings for the week P 5700

b. Work in Process P 4100

Factory Overhead 900
Administrative Salaries 700
Payroll P 5000
d double-time
2. Bel Gran
Bel Gran earns P45 per hour for up to 300 units of production per eight-hour day. If she produces
more than 300 pieces per day, she will receive an additional piece rate of P1.20 per unit.

A summary of her work week follows:

Hours Pieces
Worked Finished
Monday 8 350
Tuesday 8 280
Wednesday 8 320
Thursday 8 290
Friday 8 300

a. Determine Gran’s earnings for each day and for the week.
b. Prepare the journal entry to distribute the payroll.

Answers:
a. Hours Pieces Earnings @ Earnings @
Worked Finished P45.00/hr P1.20/unit
Monday 8 350 360 420
Tuesday 8 280 360 336
Wednesday 8 320 360 384
Thursday 8 290 360 348
Friday 8 300 360 360
1,800 1,848

b. Work in Process P 1,848

Factory Overhead 36
Payroll P 1,884
 If she produces
P1.20 per unit.

Make-up Payroll
Guarantee Earnings
420
24 360
384
12 360
360
36 1,884
4. Trix Company
Trix Company’s Schedule of Earnings and Payroll taxes for the period ended March 28 - 31 to be paid April 5 fo

Gross Wages SSS

Non-factory:
Sales P750,000 P 22,500
Administrative 400,000 12,000
1,150,000 34,500
Factory:
Direct labor 5,200,000 130,000
Overtime premium 450,000 13,500
Indirect labor 1,000,000 25,000
6,650,000 168,500
P7,800,000 P203,000

Prepare the journal entries to:

a. Accrue the payroll in the appropriate period
b. Distribute the accrued payroll in the appropriate period
c. Recognize related accrued employer’s payroll taxes in the appropriate period assuming payroll taxes are spr

Answers:
a. Payroll P 7,800,000
Wages Payable P 7,800,000

b. Work in Process P 5,200,000

Factory Overhead 1,450,000
Sales Salaries 750,000
Administrative Salaries 400,000
Payroll P 7,800,000

c. Factory Overhead P 301,500

Payroll Tax Expense - Sales Salaries 45,000
Payroll Tax Expense - Administrative Salaries 24,000
SSS Premium Payable P 203,000
Philhealth Premium Payable 78,000
Pag-ibig Premium Payable 89,500
rch 28 - 31 to be paid April 5 follow:

PhilHealth Pag-Ibig Total payroll taxes

P7,500 P15,000 P45,000

4,000 8,000 24,000
11,500 23,000 69,000

52,000 52,000 234,000

4,500 4,500 22,500
10,000 10,000 45,000
66,500 66,500 301,500
P78,000 P89,500 P370,005

assuming payroll taxes are spread over all jobs produced.