Great Manufacturing Company received and paid a premium notice on January 2 for workers' compensation insurance stating the rates for the new year. Estimated employees' earnings for the year are as follows:ClassificationEstimated Wagesand SalariesRate per Hundred(Percent)EstimatedPremiumOffice clerical$92,000 0.11 $101.20 Warehouse work29,000 0.92 266.80 Manufacturing264,000 2.20 5,808.00 $6,176.00 At the end of the year, the exact figures for the payroll are as follows:ClassificationActual Wagesand SalariesRate per Hundred(Percent)ExactPremiumOffice clerical$93,000 0.11 $102.30 Warehouse work30,000 0.92 276.00 Manufacturing267,000 2.20 5,874.00 $6,252.30 Required:a. Record the estimated premium entry for the payment on January 2, in general journal form.b. Record the adjusting entries on December 31 for the insurance expired and for the additional premium. (Journalize the adjusting entry for the insurance first, then the additional premium.) If required, round your final answer to the nearest cent.

Great Manufacturing company a. Record the estimated premium entry for the payment on…

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College Accounting, Chapters 1-27 (New in Accounting from Heintz and Parry)

22nd Edition

ISBN:9781305666160

Author:James A. Heintz, Robert W. Parry

Publisher:James A. Heintz, Robert W. Parry

Chapter9: Payroll Accounting: Employer Taxes And Reports

Section: Chapter Questions

Problem 9SPB

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Great Manufacturing Company received and paid a premium notice on January 2 for workers' compensation insurance stating the rates for the new year. Estimated employees' earnings for the year are as follows:

Classification	Estimated Wages and Salaries	Rate per Hundred (Percent)	Estimated Premium
Office clerical	$92,000	0.11	$101.20
Warehouse work	29,000	0.92	266.80
Manufacturing	264,000	2.20	5,808.00
			$6,176.00

At the end of the year, the exact figures for the payroll are as follows:

Classification	Actual Wages and Salaries	Rate per Hundred (Percent)	Exact Premium
Office clerical	$93,000	0.11	$102.30
Warehouse work	30,000	0.92	276.00
Manufacturing	267,000	2.20	5,874.00
			$6,252.30

Required:

a. Record the estimated premium entry for the payment on January 2, in general journal form.

b. Record the adjusting entries on December 31 for the insurance expired and for the additional premium. (Journalize the adjusting entry for the insurance first, then the additional premium.) If required, round your final answer to the nearest cent.

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