Welch Company Has 7 Sales Employees, Each of Whom Earns

question 44

Essay

Welch Company has 7 sales employees, each of whom earns $2,500 per month and is paid the last working day of the month. CPP is 4.95% and EI is 1.66%. Withholdings for the employees also include federal and provincial income tax of $2,800 (total for all five) and medical insurance premiums of $210 for each employee.
1) Prepare the general journal entry to accrue the payroll on March.
2) Prepare the general journal entry to record Welch Company's payroll tax expense for March.

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Definitions:

Amortized Cost

The accounting method that gradually reduces the book value of an intangible or tangible asset through periodic charges to income.

IFRS

International Financial Reporting Standards (IFRS) are a set of accounting standards developed by the International Accounting Standards Board (IASB) that outline how financial statements should be prepared and disclosed.

Straight-Line Depreciation

A method of calculating the depreciation of an asset which allocates an equal portion of the asset's cost over each year of its useful life.

Useful Lives

The estimated period during which an asset is expected to be usable for the purpose for which it was acquired.