Problem 2The chairman who works for a company in the private sector receives a monthly basic salary ofL.E. 10,000 (of which L.E. 150 special increment). In addition, he receives L.E. 1000 per monthas work nature allowance, L.E. 2000 per month as travel allowance, LE. 100 per month as socialincrement, L.E. 5000 per year as representation allowance and L.E. 1200 per year as specialincrement not added to the basic salary.If you know that he receives L.E. 15,000 annually as his share in the company profits, Inaddition to that, he pays L.E. 1800 annual life insurance premium to favor of his minor sons.Required:a) Calculate tax due per monthb) How much cash will the chairman receive in his handc) Accounting entry needed to record the employee salary

In Egypt, the term "payroll" refers to the total remuneration that a company gives to its workers…

Answered: Required: a) Calculate tax due per…

Required: a) Calculate tax due per month b) How much cash will the chairman receive in his hand c) Accounting entry needed to record the employee salary

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Question

Problem 2
The chairman who works for a company in the private sector receives a monthly basic salary of
L.E. 10,000 (of which L.E. 150 special increment). In addition, he receives L.E. 1000 per month
as work nature allowance, L.E. 2000 per month as travel allowance, LE. 100 per month as social
increment, L.E. 5000 per year as representation allowance and L.E. 1200 per year as special
increment not added to the basic salary.
If you know that he receives L.E. 15,000 annually as his share in the company profits, In
addition to that, he pays L.E. 1800 annual life insurance premium to favor of his minor sons.
Required:
a) Calculate tax due per month
b) How much cash will the chairman receive in his hand
c) Accounting entry needed to record the employee salary

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Step 1: Definition of Payroll Based on Egypt

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Step 2: Calculation of Tax Due per Month

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Step 3: Calculation of Amount of Cash Received in Hand

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Step 4: Required Journal Entry

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