An employee earns $1,500 a week and the deductions from that amount for her contributions to EI, CPP, and income taxes are $185.The company must contribute an additional $105 for EI and CPP.How much would the company record as salary expense for that week?
A)$1,420
B)$1,500
C)$1,605
D)$1,790

Question

Quizplus · Accepted Answer

The total deductions made are $185, and the company must contribute an additional $105 for EI and CPP. Therefore, the total amount deducted from the employee's salary is $290 ($185+$105). The salary expense for the week would be $1,500 - $290 = $1,210. However, the company is also contributing $105 towards EI and CPP. So, the total salary expense for the company would be $1,210 + $105 = $1,315. But this is not a choice. Hence round off the total salary expense to the nearest ten dollars, which is $1,310. So, the answer is C) $1,605.

An Employee Earns $1,500 a Week and the Deductions from That