Brief Exercise 10-3 Zerbe Consulting Inc.’s gross salaries for the biweekly peri

Question

Brief Exercise 10-3

Zerbe Consulting Inc.’s gross salaries for the biweekly period ended August 24 were $13,600. Deductions included $756 for CPP, $256 for EI, and $5,921 for income tax. The employer’s payroll costs were $756 for CPP and $358 for EI. Prepare journal entries to record (a) the payment of salaries on August 24; (b) the employer payroll costs on August 24, assuming they will not be remitted to the government until September; and (c) the payment to the government on September 3 of all amounts owed. (Credit account titles are automatically indented when the amount is entered. Do not indent manually.)

Explanation / Answer

(a) Aug 22

Salaries Expense DR     13,600

Income Tax Payable CR                                 5,921

CPP Payable CR 756

EI Payable CR 256

Cash ($13,600 - $5,921 - $756 - $256) CR 6,667

(b) Aug 22    Employee Benefits Expense DR 1,114

                         CPP Payable      CR                          756

                           EI Payable    CR    358

(c) Sept 3

Income Tax Payable DR 5,921

CPP Payable ($756 + $756) DR 1,512

EI Payable ($256 + $358) DR 614

Cash ($5,921 + $1,512 + $614) CR                 8,047

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