Workers' Compensation Insurance and Adjustment Specialty Manufacturing estimated that its total payroll for the coming year would be $462,500. The workers' compensation insurance premium rate is 0.2%.

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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Workers' Compensation Insurance and Adjustment

Specialty Manufacturing estimated that its total payroll for the coming year would be $462,500. The workers' compensation insurance premium rate is 0.2%.

1. Calculate the estimated workers' compensation insurance premium.
$4
Prepare the journal entry for the payment as of January 2, 20--.
Page:
DOC. POST.
DATE
ACCOUNT TITLE
DEBIT
CREDIT
NO,
REF.
20--
1
Jan. 2
1
2
3
3
2. Assume that Specialty Manufacturing's actual payroll for the year is $469,500.00. Calculate the total insurance premium owed.
Prepare a journal entry as of December 31, 20--, to record the adjustment for the underpayment. The actual payment of the additional premium will take place in January of the next year.
Page:
DOC. POST.
DATE
ACCOUNT TITLE
DEBIT
CREDIT
NO.
REF.
20--
1
Dec. 31
1
2
2
3
3
Transcribed Image Text:1. Calculate the estimated workers' compensation insurance premium. $4 Prepare the journal entry for the payment as of January 2, 20--. Page: DOC. POST. DATE ACCOUNT TITLE DEBIT CREDIT NO, REF. 20-- 1 Jan. 2 1 2 3 3 2. Assume that Specialty Manufacturing's actual payroll for the year is $469,500.00. Calculate the total insurance premium owed. Prepare a journal entry as of December 31, 20--, to record the adjustment for the underpayment. The actual payment of the additional premium will take place in January of the next year. Page: DOC. POST. DATE ACCOUNT TITLE DEBIT CREDIT NO. REF. 20-- 1 Dec. 31 1 2 2 3 3
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