Demonstration Problems

Sharp’s Electronics pays its employees monthly. Payments made by the company on November 30, 20X6, follow. Cumulative amounts paid to the persons named prior to November 30 are also given.

1. Janet Hays, president, gross monthly salary of $ 4000.00 with cumulative earnings of $ 44000.
2. Tom Keltner, vice president, gross monthly salary of $ 3000.00 with cumulative earnings of $33000.00.
3. Mary Jones, independent accountant who audits the company’s accounts and perform consulting services, $ 16000.00 gross amount paid prior to November 30, $ 24000.00
4. Mike Sharp, treasurer, gross monthly salary of $ 2000.00 with cumulative earnings of $ 22000.00.
5. Payment to Professional Cleaning Services for monthly service of Tom Bush, a cleaning person, $ 900.00, amount paid to Professional Cleaning Prior to November 30, $ 12400.00

Instructions:

1. Prepare a schedule showing:
1. Each employee’s cumulative earnings prior to November 30.
2. Each employee’s gross earnings for November
3. The amounts to be withheld from the employee’s earnings. The Cpp rate is 4.3% with a threshold of $ 3500.00. The EI rate is 2.25%. The provincial and federal taxes withheld are Janet $ 241.70, $ 598.85; Tom $ 148.35, $ 378.20; and Mike $ 78.00, $ 202.65.
4. The net amount due to each employee.
5. The total gross earnings, the total of each payroll tax deduction, and the total net amount payable to employees.
2. Prepare the journal entry to record the company’s payroll on November 30. Use Journal page 21, omit explanations.
3. Prepare the general journal entry to record payments to employees on November 30.

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