You obtained a payroll summary for all employees at AC Stores for January 20.7: Employees contribution towards the pension fund, R168 000 Employer's contribution towards the pension fund, R168 000 Taxation (PAYE) deductions, R369 600 Medical aid fund deductions, R24 000 Medical aid fund contributions by the employer, R12 000 Net remuneration paid, R1 400000 On 6 February 20.7 the payroll clerk drafted a journat entry to derecognise the January payroll creditors. Which ONE of the following is the correct amount with which the Bank account would nave been credited?
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To determine the correct amount with which the Bank account would have been credited, you start with the total net remuneration paid to employees, which is R1,400,000. However, since the employer's contributions to the pension fund (R168,000) and medical aid fund (R12,000) are not paid directly to employees, we don't include these amounts when crediting the Bank account. Therefore, the amount credited to the Bank account is strictly the net remuneration of R1,400,000. An important point to note here is that the deductions such as PAYE, pension contributions, and medical aid contributions need to be accounted for separately as liabilities until they are paid to the relevant authorities or funds. So, the Bank account will solely reflect the net remuneration disbursement. In summary, the correct amount credited to the Bank account would be R1,400,000.
