Company A employs its cleaning staff on a ten-day fortnight, with employees being paid on Fridays. The fortnightly wages expense is $148,000 and employees are paid in arrears. That is, when the employees are paid, the wages paid are for work performed in the preceding fortnight. Company A retains the following amounts out of the employees’ wages on behalf of its employees which it then remits at month end to each of the entities noted: $30,000 per fortnight to pay the Australian Taxation Office for pay-as-you-go (PAYG) tax on behalf of the employees. $2,000 per fortnight to pay staff premiums to Healthy Medical a Medical Benefits Fund. $1,500 to the staff union fees to the Mining Employees Union. In addition to paying its employees’ wages and salaries, Company A also contributes to an employees’ Defined Contribution Superannuation Fund as required by the Superannuation Guarantee Charge which is equal to 9.5% of employees’ gross wages.

Required: 

If we assume that the balance date falls on a Tuesday, provide the accounting entries at the balance date to recognise the transactions noted above. You must indicate at the end of each general ledger account name if the account is an asset, liability, expense or revenue account.

Answer rating: 100% (QA)

Stepbystep explanation DR Australian Taxation Expense ... View the full answer