Question

Specialty Manufacturing estimated that its total payroll for the coming year would be $450,000. The workers' compensation insurance premium rate is 0.2%.

REQUIRED
1. Calculate the estimated workers' compensation insurance premium and prepare the journal entry for the payment as of January 2, 20--.
2. Assume that Specialty Manufacturing's actual payroll for the year is $456,000. 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.



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  • CreatedJune 07, 2014
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