Chapter 11
Payroll
340
Review Exercise
Michelle’s Crafts has three employees.They get paid bi-weekly (every two weeks).The following
table lists the employees, the hours they worked over the last two weeks and their pay rate.
Name
HourlyWage Hours
Flower, Blossom $14.00
88
Painter, Rob
$13.50
76
Scrap, Brook
$14.50
82
Any hours over 40 per week (or 80 in two weeks) is overtime and paid at 1.5 times the regular
rate. Each employee donates $10 to a charity and contributes $25 to a health plan.The company
matches the employees’ health plan deduction. Deductions for CPP and EI are already provided.
Assume income tax is calculated at 18% of their gross pay. Michelle's Crafts also accrues 4%
vacation pay for all employees and pays workers' compensation at 0.6% of the gross pay.
Required
a) Complete a payroll register for the bi-weekly pay.
b) Prepare a journal entry to pay the employees.
c) Prepare a journal entry to accrue vacation pay.
d) Prepare a journal entry to record the additional employer expense.
e) Prepare a journal entry to make a government remittance on July 15, 2015 using just the
numbers from this pay period.
See Appendix I for solutions.
a) Payroll register
Payroll Period
June 8 to June 19, 2015
Payroll Register
Deductions
Name
Gross
Earnings
CPP
EI
Income Tax Charitable
Donations
Health
Plan
Total
Deductions Net Pay
