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Background information:

You have recently started working at an accounting firm and the partner has assigned one of the clients, White Lily Hair Salon Inc. (White Lily), to you. The Payroll Manager, Jasmine Kaur, has taken a leave of absence from White Lily so the owner, Tracy Williamson, would like you to help her with some questions she has about her companys payroll.

The following information about the business is available:

Company Name	White Lily Hair Salon Inc.
Industry	Hair & Aesthetic Services
Location	518 Beauty Street, Winnipeg, Manitoba R4R 3W7
Business Number	98765 4321 RC 0001
Number of employees	8 comprised of office personnel, hairdressers and assistants, which include both part-time and full time employees
Ages of employees	16 to 65
Salary range of employees	$25,000 to $132,000
Annual payroll	2020: $425,000 (actual) 2021: $450,000 (estimated)
Pay cycle	Biweekly

4. One of our full-time employees, Gina Magnolia, was scheduled to work on Good Friday; however, she missed her shift because her son was ill. How would this affect her general holiday pay? (2 points)

5. Every Friday, we post the work schedule for our hairdressers and my receptionist schedules their appointments. White Lily Hair Salon purchases salon quality haircare products for the hairdressers to use. We also have a classy shirt and apron that hairdressers wear to work.

1. Our hairdressers are currently hired as employees. I heard that there are advantages to hiring workers as independent contractors. From a business perspective, what are three advantages of hiring independent contractors instead of employees? (3 marks)

2. Could I have them sign a new contract to change them from employees to independent contractors? Use three of CRAs factors to consider to explain why or why not. (3 marks)

1. It would be helpful to have a reference chart with rates and maximums for payroll.

1. Could you please update the following chart for 2021 and 2022? (3.5 points)

2. Please include two other rates you feel would be helpful to have in this chart. (2 points)

Payroll rates & maximums:	2021	2022
Maximum annual pensionable earnings
CPP rate
Maximum annual employee CPP contribution
Maximum annual insurable earnings
EI rate
Maximum annual employee EI premium
Maximum assessable earnings (WCB)

2. The June 18, 2021 payroll register is summarized below. The company matches the employees payments for the retirement program and vacation pay is accrued at 8%. Please record the following:

1. What journal entries would be required to record this payroll register and employer expenses relating to this pay run? (8.5 points)

Office Salaries	Hairdresser Salaries	Total Earnings	EI Premium	CPP Premium	Income Tax	Retirement program	Charitable donations
6,500.00	9,850.00	16,350.00	258.33	883.74	4,905.00	654.00	120.00

Note: Assume any health taxes and WCB premiums will already be recorded.

Date	Account titles	Debit	Credit

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