Concord Corporation offers enriched parental benefits to its staff. While the government provides compensation based on Employment Insurance legislation for a period of 12 months, Concord increases the amounts received and extends the period of compensation. The benefit program tops up the amount received to 100% of the employee’s salary for the first 12 months, and pays the employee 75% of his or her full salary for another 6 months after the Employment Insurance payments have ceased.
Zeinab Jolan, who earns $53,700 per year, announced to her manager in early June 2017 that she was expecting a baby in mid-November. On October 29, 2017, 9 weeks before the end of the calendar year and Concord’s fiscal year, Zeinab applied for and began her 18-month maternity leave. Assume that the Employment Insurance program pays her a maximum of $720 per week for 52 weeks.
For the purpose of this question, ignore any tax, CPP, and EI deductions when making payments to Zeinab.
1. Prepare all entries that Concord Corporation must make during its 2017 fiscal year related to the maternity benefits plan in regard to Zeinab Jolan
A) to record employee benefit expense
B) to record payment of parental leave benefits for one week
2. Prepare one entry to summarize all entries that the company will make in 2018 relative to Zeinab Jolan’s leave
3. Calculate the amount of maternity benefits payable at December 31, 2017, and 2018.