Individual Income Taxes
43rd Edition
ISBN: 9780357109731
Author: Hoffman
Publisher: CENGAGE LEARNING - CONSIGNMENT
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Question
Chapter 13, Problem 27P
a.
To determine
Calculate the amount of G’s work opportunity credit.
b.
To determine
Calculate the amount of wage deduction for 2019.
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Jerome Company has 35 employees who work 8 hours a day and are paid hourly.On January 1, 2018, the entity began a program of granting the employees 10 days ofpaid vacation each year. Vacation days earned in 2018 may first be taken on January 1,2019.Year Hourly wage
Vacation daysearned by eachemployee
Vacation days usedby each employee2018 129 10 02019 135 10 82020 142.50 10 1015. What is the vacation pay expense for 2018?a. 0b. P361,200c. P378,000d. P344,40016. What is the accrued liability on December 31, 2020?a. P474,600b. P453,600c. P399,000d. P478,800
17. What is the accrued liability on December 31, 2020 assuming the policy is to accrueliability at the end of each year at the wage rate for that year?a. P474,600b. P453,600c. P399,000d. P478,800
Provide SOLUTION
Mr. Mani started his new job in Burlington,
Ontario on 15t January 2021 with Mandy's
Inc. and gets his payment weekly. His annual
salary package is $78,000. Each week his
gross salary is $1500.00. His Federal claim
code is 1 and Provincial claim code is 1. How
much is the total Employee withholdings
taxes (CPP, El & Income Tax) and employer's
contribution (CPP & EI) for 2021 that will be
submitted to CRA by Mandy's Inc. (Assume
that Mr. Mani is the only employee of
Mandy's Inc. for calendar year 2021)
A.$24171.80
B.$23815.98
C.$27851.26
D.$25796.00
Beginning 2019, Maigo and Maika Company grant 15 days of vacation a year to each of the 100 employees if they are still employed at the end of the year. The vacation accumulates and may be taken starting January 1 of the following year. The employees work 8 hours a day. The rate for all employees during 2019, 2020, and 2021 are P70, P75 and P80 per hour, respectively. During 2020 and 2021, the employees each used an average of 5 and 8 vacation days, respectively. The entity’s policy is to record the liability existing at the end of each year at the wage rate for the current year.
1. What amount should be reported as vacation liability on December 31, 2019, 2020 and 2021?2. What amount should be reported as vacation pay expense on December 31, 2019, 2020, and 2021, respectively?
Chapter 13 Solutions
Individual Income Taxes
Ch. 13 - Prob. 1DQCh. 13 - LO.2 Clint, a sell-employed engineering...Ch. 13 - Prob. 3DQCh. 13 - Prob. 4DQCh. 13 - Prob. 5DQCh. 13 - LO.4 Mark and Lisa are approaching an exciting...Ch. 13 - Prob. 7DQCh. 13 - Prob. 8DQCh. 13 - Prob. 9DQCh. 13 - Describe the two additional Medicare taxes that...
Ch. 13 - Prob. 11CECh. 13 - Prob. 12CECh. 13 - LO.3 During 2019, Lincoln Company hires seven...Ch. 13 - Prob. 14CECh. 13 - Samuel and Annamaria are married, file a joint...Ch. 13 - Prob. 16CECh. 13 - Prob. 17CECh. 13 - LO.4, 8 Ava and her husband, Leo, file a joint...Ch. 13 - Prob. 19CECh. 13 - Prob. 20CECh. 13 - LO.5 In 2019, Bianca earned a salary of 164,000...Ch. 13 - Prob. 22CECh. 13 - LO.7 Determine the additional Medicare taxes for...Ch. 13 - Prob. 24PCh. 13 - LO.2 Oak Corporation has the following general...Ch. 13 - Prob. 26PCh. 13 - Prob. 27PCh. 13 - Prob. 28PCh. 13 - Prob. 29PCh. 13 - Prob. 30PCh. 13 - LO.4 Jason, a single parent, lives in an apartment...Ch. 13 - LO.4, 8 Joyce, a widow, lives in an apartment with...Ch. 13 - Prob. 33PCh. 13 - Prob. 34PCh. 13 - Prob. 35PCh. 13 - Prob. 36PCh. 13 - Prob. 37PCh. 13 - Prob. 38PCh. 13 - LO.5 During 2019, Greg Cruz (1401 Orangedale Road,...Ch. 13 - Prob. 40PCh. 13 - Jane, who is expecting to finish college in May...Ch. 13 - Julie, being self-employed, is required to make...Ch. 13 - Prob. 43PCh. 13 - Beth R. Jordan lives at 2322 Skyview Road, Mesa,...Ch. 13 - Prob. 45CPCh. 13 - Ashby and Curtis, married professionals, have a...Ch. 13 - Prob. 2RPCh. 13 - Prob. 4RPCh. 13 - Prob. 1CPACh. 13 - Prob. 2CPACh. 13 - Prob. 3CPACh. 13 - Prob. 4CPACh. 13 - Prob. 5CPA
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- During 2019, Jake Gore worked for two different employers. Until May, he worked for Wonderman Construction Company in Kansas City, Kansas, and earned 21,500. The state unemployment rate for Wonderman is 4.6%. He then changed jobs and worked for Buxmont Improvement Company in Mobile, Alabama, and earned 33,100 for the rest of the year. The state unemployment rate for Buxmont is 5.1%. Determine the unemployment taxes (FUTA and SUTA) that would be paid by: a. Wonderman Construction Company................................ _______ b. Buxmont Improvement Company.................................... _______arrow_forwardTax Drill - Work Opportunity Credit During 2020, Lincoln Company hires seven individuals who are certified to be members of a qualifying targeted group. Each employee works in excess of 600 hours and is paid wages of $7,500 during the year. Lincoln Company's work opportunity credit is $arrow_forwardHemal Thomas is an employee in British Columbia. The net pay calculation is for the first bi-weekly pay of 2021. The employee is 32 years old and is entitled to 70 hours regular pay at $20/hour, 3 hours of overtime at time-and-a-half, and a $100 safety shoe allowance for this pay period. The employee also receives a monthly car allowance of $200 and the émployer pays group life insurance of $35 a month. Vacation is at 4% accrued. The employee contributes $20 per pay to the United Way, $20 per month to the company social club, and $15 per pay for union dues. The employee's TD1 federal and provincial are code 2. The British Columbia tax is: A) $53.70 b) $54.30 c)$58.90 d)$50.75arrow_forward
- O Hemal Thomas is an employee in British Columbia. The net pay calculation is for the first bi-weekly pay of 2022. The employee is 32 years old and is entitled to 70 hours regular pay at $20/hour, 3 hours of overtime at time-and-a-half, and a $100 safety shoe allowance for this pay period. The employee also receives a monthly car allowance of $200 and the employer pays group life insurance of $35 a month. Vacation at 4% is accrued. The employee contributes $20 per pay to the United Way, $20 per month to the company social club, and $15 per pay for union dues. The employee's TD1 federal and provincial are code 2. (Assume 26 weeks in a year.) CPP contribution is: Multiple Choice $73.76 $7913 $79.78arrow_forward3. Mary is hired by ABC Company on 1/1/85. She is eligible to qualify for the company's new hire bonus program. If an employee qualifies at year-end, she will receive a cash bonus payable in two equal install- ments, half on January 1 and half on July 1. The first-year bonus is $2,000 and increases by $2,000 each year. Assuming Mary qualified each year (i.e., she received her first payments on 1/1/86) and deposited her bonus in an account that pays an 8% annual effective rate of interest, what is the accumulated value of her bonus payments through 7/1/90? A. Less than $33,500 B. At least $33,500, but less than $33,750 C. At least $33,750, but less than $34,000 D. At least $34,000, but less than $34,250 E. At least $34,250arrow_forwardOn January 1, 2019, FrankKeating Company decided to grant its employees 10 vacation days and five sick days each year. Vacation days are earned can be carried over to the next year but not sick days. Each employee took an average of four sick days in 2019. During the year, each of Mike’s sixty employees earned P300 per day (increases by 5% each year) and had three unused vacation pays as of yearend. How much is the Vacation Pay Expense? How much is the Sick Pay Expense? How much is the Liability for Compensated Absences?arrow_forward
- Dana Company has 25 employees who work 8-hour days and are paid hourly. On January 1, 2021, the company began a program of granting its employees 9 days of paid vacation each year. Vacation days earned in 2021 may first be taken on January 1, 2022. Information related to these employees is as follows: Hourly Year Wages Vacation Days Earned by Each Employee Vacation Days Used Each Employee 2021 $25.80 0 2022 27.00 8 9 9 Dana Company has chosen to accrue the liability for compensated absences at the current rates of pay in effect when the compensated time is earned. What is the balance of liability for compensated absences that should be reported on December 31, 2022? A. $53,760. OB. $92,880. O C. $97,200. OD. $48,600.arrow_forwardHemal Thomas is an employee in British Columbia. The net pay calculation is for the first bi-weekly pay of 2022. The employee is 32 years old and is entitled to 70 hours regular pay at $20/hour, 3 hours of overtime at time - and - a - half, and a $100 safety shoe allowance for this pay period. The employee also receives a monthly car allowance of $200 and the employer pays group life insurance of $35 a month. Vacation at 4% is accrued. The employee contributes $20 per pay to the United Way, $20 per month to the company social club, and $15 per pay for union dues. The employee's TD1 federal and provincial are code 2. (Assume 26 weeks in a year.) Net pay for the pay period is: Multiple Choice $1,345.25. $ 1,356.19. $1,354.30. $1,351.68.arrow_forwardSilver Ltd. has 35 employees who work 8-hour days and are paid hourly. On January 1, 2020, the company began a program of granting its employees 10 days paid vacation each year. Vacation days earned in 2020 may be taken starting on January 1, 2021. Information relative to these employees is as follows: Hourly Vacation Days Earned Vacation Days Used Year Wages by Each Employee by Each Employee 2020 $12.90 10 2021 13.50 10 8 2022 14.25 10 10 Silver has chosen to accrue the liability for compensated absences (vacation pay) at the current rates of pay in effect when the vacation pay is earned. What is the amount of vacation pay expense that should be reported on Silver's income statement for 2020? O $36,120 O $0 O $37,800 O $34,440arrow_forward
- Hemal Thomas is an employee in British Columbia. The net pay calculation is for their first bi- weekly pay of 2023. The employee is 32 years old and is entitled to 70 hours regular pay at $ 20/hour, 3 hours of overtime at time - and - a - half, and a $100 safety shoe allowance for this pay period. The employee also receives a monthly car allowance of $200 and the employer pays group life insurance of $35 a month. Vacation at 4% is accrued.The employee contributes $20 per pay to the United Way, $20 per month to the company social club, and $15 per pay for union dues. The employee's TD1 federal and provincial are code 2. (Assume 26 weeks in a year.) Total deductions are: Multiple Choice $330.63. $324.02. $347.99. $337.06.arrow_forwardTeal Company began operations on January 2, 2019. It employs 11 individuals who work 8-hour days and are paid hourly. Each employee earns 11 paid vacation days and 7 paid sick days annually. Vacation days may be taken after January 15 of the year following the year in which they are earned. Sick days may be taken as soon as they are earned; unused sick days accumulate. Additional information is as follows. Teal Company has chosen to accrue the cost of compensated absences at rates of pay in effect during the period when earned and to accrue sick pay when earned. Actual Hourly Wage Rate 2019: $8 2020: $9 Vacation Days Used by Each Employee 2019: $0 2020: $10 Sick Days Used by Each Employee 2019: $5 2020: $6 (a) Prepare journal entries to record transactions related to compensated absences during 2019 and 2020. (If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. Credit account titles are automatically indented when amount is…arrow_forwardTeal Company began operations on January 2, 2019. It employs 11 individuals who work 8-hour days and are paid hourly. Each employee earns 11 paid vacation days and 7 paid sick days annually. Vacation days may be taken after January 15 of the year following the year in which they are earned. Sick days may be taken as soon as they are earned; unused sick days accumulate. Additional information is as follows. Teal Company has chosen to accrue the cost of compensated absences at rates of pay in effect during the period when earned and to accrue sick pay when earned. Actual Hourly Wage Rate 2019: $8 2020: $9 Vacation Days Used by Each Employee 2019: $0 2020: $10 Sick Days Used by Each Employee 2019: $5 2020: $6 Compute the amounts of any liability for compensated absences that should be reported on the balance sheet at December 31, 2019 and 2020. 2019 2020 Vacation Wages Payable $enter a dollar amount $enter a dollar amount Sick Pay Wages Payable $enter a…arrow_forward
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