Sage Corporation provides a defined contribution pension plan for its employees. Under the plan, the company deducts 6% of each employee's gross pay for each bi-weekly pay period. The company also contributes 7% of the employees' gross pay to the pension plan. The combined pension contributions are then submitted to the pension trustee within 11 days of the end of the month in which the pay was earned. For the first pay period of October (from Sunday October 1 to October 14, 2020), Sage's total gross payroll was $171,000. Total gross payroll for the period October 15 through Saturday, October 28, 2020, was $162,000. The total anticipated payroll for the period October 29 through November 10, 2020, was $180,000 (employees worked Monday through Friday each week). On November 10, 2020, Sage submitted the pension contributions to the trustee for the month of October (including accruals up to and including October 31). a. Prepare the October 14 journal entry to record the payroll, including employee and employer contributions to the pension plan. For simplicity, ignore income taxes and other statutory deductions. b. Prepare the October 28 journal entry to record the payroll, including employee and employer contributions to the pension plan. For simplicity, ignore income taxes and other statutory deductions. c. Prepare the October 31 journal entry to accrue the last two days of October's payroll, including employee and employer contributions to the pension plan. For simplicity, ignore income taxes and other statutory deductions. d.Prepare the November 10 journal entry to record the payment of the pension contributions to the trustee.
Sage Corporation provides a defined contribution pension plan for its employees. Under the plan, the company deducts 6% of each employee's gross pay for each bi-weekly pay period. The company also contributes 7% of the employees' gross pay to the pension plan. The combined pension contributions are then submitted to the pension trustee within 11 days of the end of the month in which the pay was earned. For the first pay period of October (from Sunday October 1 to October 14, 2020), Sage's total gross payroll was $171,000. Total gross payroll for the period October 15 through Saturday, October 28, 2020, was $162,000. The total anticipated payroll for the period October 29 through November 10, 2020, was $180,000 (employees worked Monday through Friday each week). On November 10, 2020, Sage submitted the pension contributions to the trustee for the month of October (including accruals up to and including October 31). a. Prepare the October 14 journal entry to record the payroll, including employee and employer contributions to the pension plan. For simplicity, ignore income taxes and other statutory deductions. b. Prepare the October 28 journal entry to record the payroll, including employee and employer contributions to the pension plan. For simplicity, ignore income taxes and other statutory deductions. c. Prepare the October 31 journal entry to accrue the last two days of October's payroll, including employee and employer contributions to the pension plan. For simplicity, ignore income taxes and other statutory deductions. d.Prepare the November 10 journal entry to record the payment of the pension contributions to the trustee.
Intermediate Accounting: Reporting And Analysis
3rd Edition
ISBN:9781337788281
Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Chapter19: Accounting For Post Retirement Benefits
Section: Chapter Questions
Problem 1RE
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Transcribed Image Text:Sage Corporation provides a defined contribution pension plan for its employees. Under the plan, the company deducts
6% of each employee's gross pay for each bi-weekly pay period. The company also contributes 7% of the employees'
gross pay to the pension plan. The combined pension contributions are then submitted to the pension trustee within 11
days of the end of the month in which the pay was earned.
For the first pay period of October (from Sunday October 1 to October 14, 2020), Sage's total gross payroll was $171,000.
Total gross payroll for the period October 15 through Saturday, October 28, 2020, was $162,000. The total anticipated
payroll for the period October 29 through November 10, 2020, was $180,000 (employees worked Monday through Friday
each week). On November 10, 2020, Sage submitted the pension contributions to the trustee for the month of October
(including accruals up to and including October 31).
a. Prepare the October 14 journal entry to record the payroll, including employee and employer contributions to the
pension plan. For simplicity, ignore income taxes and other statutory deductions.
b. Prepare the October 28 journal entry to record the payroll, including employee and employer contributions to the
pension plan. For simplicity, ignore income taxes and other statutory deductions.
c. Prepare the October 31 journal entry to accrue the last two days of October's payroll, including employee and employer
contributions to the pension plan. For simplicity, ignore income taxes and other statutory deductions.
d.Prepare the November 10 journal entry to record the payment of the pension contributions to the trustee.
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