BuyFindarrow_forward

College Accounting, Chapters 1-27

23rd Edition
HEINTZ + 1 other
ISBN: 9781337794756

Solutions

Chapter
Section
BuyFindarrow_forward

College Accounting, Chapters 1-27

23rd Edition
HEINTZ + 1 other
ISBN: 9781337794756
Textbook Problem

WORKERS’ COMPENSATION INSURANCE AND ADJUSTMENT Willamette Manufacturing estimated that its total payroll for the coming year would be $650,000. The workers’ compensation insurance premium rate is 0.3 %.

REQUIRED

  1. 1. Calculate the estimated workers’ compensation insurance premium and prepare the journal entry for the payment as of January 2, 20--.
  2. 2. Assume that Willamette Manufacturing’s actual payroll for the year was $672,000. Calculate the total insurance premium owed and 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.
  3. 3. Assume instead that Willamette Manufacturing’s actual payroll for the year was $634,000. Prepare a journal entry as of December 31, 20--, for the total amount that should be refunded. The refund will not be received until the next year.

1.

To determine

Calculate the estimated workers’ compensation insurance premium and prepare the journal entry for the payment as of January 2, 20--.

Explanation

Workmen’s compensation insurance:

Workmen’s compensation insurance is provided to employees as a compensation for the illness or injury suffered by them during the work. The employer pays the full Workmen’s compensation insurance amount to the workers.

Calculate the estimated workers’ compensation insurance premium and prepare the journal entry for the payment as of January 2, 20--.

Calculate the estimated workers’ compensation insurance premium.

Workmen's Compensation Insurance Expense }=(Total payroll for the coming year)×(Workmen's Compensation Insurance premium rate )=$650,000×0

2.

To determine

Calculate the total insurance premium owed and prepare a journal entry as of December 31, 20--.

3.

To determine

Prepare a journal entry as of December 31, 20--, for the total amount that should be refunded.

Still sussing out bartleby?

Check out a sample textbook solution.

See a sample solution

The Solution to Your Study Problems

Bartleby provides explanations to thousands of textbook problems written by our experts, many with advanced degrees!

Get Started

Additional Business Solutions

Find more solutions based on key concepts

Show solutions add

What are the key provisions of SOX?

Accounting Information Systems

What are the two fundamental e-business models?

Foundations of Business (MindTap Course List)

What is inflation and what causes it?

Principles of Microeconomics (MindTap Course List)

A firm is about to double its assets to serve its rapidly growing market. It must choose between a highly autom...

Fundamentals of Financial Management, Concise Edition (with Thomson ONE - Business School Edition, 1 term (6 months) Printed Access Card) (MindTap Course List)