Chapter 4
Current Liabilities
165
AP-3A (
3
)
An employer has calculated the following amounts for an employee during the last week of
January 2016.
Gross Pay
$1,500
Income Taxes
331
Canada Pension Plan
71
Employment Insurance
28
Required
a) Calculate the employee’s net pay.
b) Assuming the employer’s contribution is 100% for Canada Pension Plan and 140% for
Employment Insurance, what is the employer’s portion of CPP and EI?
c) Prepare the journal entries to record payroll for the employee and record the
employer’s contribution. Assume the employee will not be paid until February 1, 2016.
Date
Account Title and Explanation
Debit
Credit
