Compute and Record Workers' Compensation Insurance Premiums for Evergreen Manufacturing

question 69

Essay

Compute and record workers' compensation insurance premiums for Evergreen Manufacturing as follows:
1. The firm estimates that its office employees will earn $49,000 next year and its factory employees will earn $150,000. The firm pays the following rates for workers' compensation insurance: $0.40 per $100 of wages for the office employees and $3.50 per $100 of wages for the factory employees. Compute the estimated premiums for 2013. On page 54 of a general journal, record the payment of the estimated premium. Date the entry January 12, 2013.
2. On January 4, 2014, an audit of the firm's payroll records for 2013 showed that the firm had actually paid wages of $53,000 to its office employees and $161,000 to its factory employees. Compute the actual premium for the year and the balance due the insurance company or the credit due the firm. In the general journal, record the entry to adjust the Workers' Compensation Insurance Expense as of the end of 2013. Date the entry December 31, 2013.

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Definitions:

Limiting Factor

An environmental condition that limits the growth, abundance, or distribution of an organism or a population within an ecosystem.

Major Nutrient

Essential chemicals needed in large quantities by living organisms to perform various physiological functions for growth and health.

Biogeochemical Cycles

The natural processes that recycle nutrients and elements between the physical environment and living organisms.

Carbon Dioxide

A colorless, odorless gas produced by burning carbon-containing materials and through respiration, and a significant greenhouse gas.