Chapter 11

Animated End of Chapter Problem

Calculation of Gross Pay

Billings Dephir Singe Total Regular wage rate $ 15 $ 30 $ 18 Regular hours x 40 x 44 x 48 Regular pay $ 600 + $ 1,320 + $ 864 = $ 2,784 Overtime premium $ 7.50 $ Overtime hours x + $ Overtime pay + $ Gross wages = $ 600 $ 15 $ x 4 60 + $ 1,380 $ 9 x 8 72 = $ 936 $

132 2,916

Accrued Vacation Pay

Annual Annual vacation vacation (weeks) (weeks) Weeks worked in year Weeks worked in year 49.5 Vacation pay as a % of regular pay 5.05% Regular pay this week x $ 600 x $ Vacation pay this week $ 30 + $ Billings Billings 2.5 2.5 : 49.5 Dephir Dephir 2.5 2.5 : 49.5

49.5

Singe Singe 2.5 2.5 : 49.5

Total Total

49.5

5.05% 5.05% 1,380 x$ 936 70 + $ 47 =

147

Table used for Parts 3 and 4

Earnings to Employee Nov. 20 Billings $ 28,500 Dephir 52,600 Singe 14,800 Totals Earnings this week $ 600 1,380 936 $ 2,916 - 67 = - 67 = Earnings subject to: CPP EI $ 533 $ 600 869 936 $ 1,402 $ 1,536

CPP m axim um earnings are $37,600 and EI m axim um earnings are $39,000. CPP - first $3,500 of incom e is exem pt. This represents $67/w eek ($3,500/52).

Amounts withheld from employees

Employee Billings Dephir Singe Totals Earnings to Nov. 20 $ 28,500 52,600 14,800 Earnings this week $ 600 1,380 936 $ 2,916 Earnings subject to: CPP EI $ 533 $ 600 869 936 $ 1,402 $ 1,536

CPP m axim um earnings are $37,600 and EI m axim um earnings are $39,000. CPP - first $3,500 of incom e is exem pt. This represents $67/w eek ($3,500/52).

Billings Incometax Income taxwithheld withheld (given) $ 127 CPP withheld withheld (3.9%) (3.9%) 21 EI withheld withheld (2.4%) (2.4%) 14 Totals Totals $ 162

Dephir $ 479 $ 479

Singe $ 269 34 22 $ 325

Total $ 875 55 37 $ 967

Employer Costs
Billings Income tax withheld (given) $ 127 CPP withheld withheld 21 (3.9%) EI withheld withheld 14 (2.4%) Totals $ 162 Billings 21 20 $ 41 Dephir $ 479 $ 479 Dephir $ Singe $ 269 34 22 $ 325 Singe 34 31 $ 65 Total $ 875 55 37 $ 967 Total 55 52 $ 106

CPP ( x 1.0) EI ( x 1.4) Totals Totals

Employees Net Pay

Regular pay Regular Regular pay pay Overtime pay Overtime Overtime pay pay Gross pay pay Gross Withholdings: Withholdings: Income Income tax taxwithholding withholding $ $ CPP withholding withholding EI withholding withholding EI Medical Medical insurnce insurnce Union Union dues dues Total withholdings Total withholdings withholdings - $$ pay to employees Net Net pay payto toemployees employees = $

Billings Billings $ $ 600 600 -$ $ 600 600

Dephir Dephir $$ 1,320 1,320 60 60 $$ 1,380 1,380

Singe Singe $ $ 864 864 72 72 $ $ 936 936

Total $ $ 2,784 132 $ $ 2,916 $ $ 875 55 36 54 170 $ $ 1,190 $ 1,726

127 127 $$ 21 21 14 14 18 18 50 50 230 230 - $$ 370 = $

479 479 $ $ 269 269 -34 34 -22 22 18 18 18 18 70 70 50 50 567 567 - $ $ 393 393 813 = $ 543

Total Employer Costs

Regular Regular pay pay Regular pay Overtime Overtime pay pay Overtime pay Gross Gross pay pay Deductions Deductions and benefits: Deductions and andbenefits: benefits: CPP ( x 1.0) $$ CPP ( (x x 1.0) EI x 1.4) 1.4) EI (( x Vacation Vacation Vacation Medical Medical insurance Medical insurance insurance Total deductions deductions and and benefits benefits + $$ Total deductions and benefits Total Total payroll-related payroll-related costs costs = $$ payroll-related costs

Billings Billings Billings 600 600 $ $$ 600 - -600 600 $ $$ 600

Dephir Dephir Dephir $1,320 1,320 1,320 $$ 60 60 60 $1,380 1,380 1,380 $$

Singe Singe Singe $ $ 864 864 864 $ 72 72 72 $ $ 936 936 936 $

Total Total $ $ 2,784 2,784 $ 132 $ $ 2,916 $ $ $ 55 51 147 75 $ $ 328 $ $ 3,244

21 21 $ $ -$ $ 34 34 20 20 -31 31 30 30 70 70 47 47 25 25 25 25 25 25 96 96 + $ $ 95 95 + $ $ 137 137 696 696 = $ $ 1,475 1,475 = $ $ 1,073 1,073

Payroll Journal Entries

Net pay to employees Regular pay Overtime pay Gross pay Withholdings: Income tax withholding 875 CPP withholding 55 EI withholding 36 Medical insurnce 54 Union dues 170 Total withholdings 1,190 Net pay to employees 1,726 Employer payroll-related costs Total Regular pay $ 2,784 Overtime pay 132 Gross pay $ 2,916 Deductions and benefits: CPP ( x 1.0) $ 55 EI ( x 1.4) 51 Vacation 147 Medical insurance 75 Total deductions and benefits $ 328 Total payroll-related costs $ 3,244 Total $ 2,784 132 2,916

General Journal Date Accounts and explanation Nov. 27 Salary expense = gross pay Income Tax Payable CPP Payable EI Payable Medical Insurance Payable Union Dues Payable Payroll Payable = net pay
To record payroll expense

PR Debit Credit 2,916 875 55 36 54 170 1,726

27 Benefits expense CPP Payable EI Payable Vacation Pay Payable Medical Insurance Payable
To record employer's share of payroll deductions and benefits expense

328 55 51 147 75