Payroll Accounting Module 1

COMPREHENSIVE APPLICATION ON PAYROLL:

The following persons are under the employment of A & B Enterprises:

Employees Monthly Salary Overtime Work

Alexander Menlo P 8,000.00 Reg. Holidays – 8 hrs.
Haydee Flores 10,000.00 Rest Day – 10 hrs.
Marie Sarmiento 15,000.00 Reg. Day – 10 hrs.

A & B is paying its employees on a semi-monthly basis. The membership fees are deducted on the first
half of the month payroll, and the withholding tax is deducted on the second half of the month payroll.
The employees did not incur any tardiness and absence during the month. They are all entitled to
overtime pay. The enterprise is using the 313 working days in a year as basis with 8 regular working
hours in a day.

The employee’s gross pay is computed as follows:

Alexander Menlo:
Basic Pay (P8,000/2) P 4,000.00
Holiday overtime [(P8,000 x 12)/313 x 200%] 613.42
Gross Pay P 4,613.42

Haydee Flores:
Basic Pay (P10,00/2) P 5,000.00
Rest day overtime [(P10,000 x 12)/313x130%] 498.40
Overtime excess of hours during rest day
[(P10,000 x 12)/313 x 130% x 125%)/8 x 12] 155.75
Gross Pay P 5,654.15

Marie Sarmiento:
Basic Pay (P15,000/2) P 7,500.00
Overtime[(P15,000 x 12)/313 x 125%/8 x 10] 898.56
Gross Pay P 8, 398.56

The payroll sheet of A & B for the first half of the month will appear as follows:

PAYROLL
For the Period January 1 to 15, 20CY

Employees Gross Pay SSS PHIC PAg-ibig Net Pay

Alexander Menlo P 4,613.42 P266.70 P100.00 P100.00 P 4,146.72
Haydee Flores 5,654.15 333.30 125.00 100.00 5,095.85
Marie Sarmiento 8,398.56 500.00 187.50 100.00 7,611.06
P18,666.13 P1,100.00 P412.50 P300.00 P16,853.63

The journal entry for the payroll would be:

Salary Expense 18,666.13

SSS Payable 1,100.00
PHIC PAYABLE 412.50
Pag-ibig Payable 300.00
Cash 16, 853.63
To record payroll

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Payroll Accounting Module 1

The recorded overtime for the second half of the month and status is as follows (no absences and
tardiness);

Employees Status Overtime Work

Alexander Menlo Single Reg.Holiday – 10 hrs
Haydee Flores Head of the family Rest day – 8 hrs
Marie Sarmiento Married Reg.Holiday – 8 hrs

The employee’s gross pay is computed as follows:

Alexandro Menlo:
Basic Pay (P8,000/2) P 4,000.00
Holiday overtime [(P8,000x120/313x200%] x [(125%/8)x10] 958.47
Gross Pay P 4, 958.47

Haydee Flores:
Basic Pay (P10,000/2) P5,000.00
Rest day overtime [(P10,000 x 12)/313 x 130%] 498.40
Gross Pay P5,498.40

Marie Sarmiento:
Basic Pay (P15,000/2) P 7,500.00
Overtime [(P15,000 x 12)/313 x 200%)] 1,150.16
Gross Pay P 8,650.16

The computation of withholding tax on employees’ income would be:

PAYROLL
For the Period January 1 to 15, 20CY

Employees Gross Pay Withholding Tax Net Pay

Alexander Menlo P 4, 958.47 P1, 122.71 P3, 835.76
Haydee Flores 5, 498.40 1,355.51 4,142.89
Marie Sarmiento 8,650.16 2,553.85 6,096.31
P19,107.03 P5,032.07 P14,074.96

The journal entry for the payroll would be:

Salary Expense 19,107.03

Withholding Tax Payable 5,032.07
Cash 14,074.96
To record payroll

The table showing the employer’s share would be:

Employees SSS EC PHIC Pagibig Total

Alexander Menlo 485.30 10.00 100.00 100.00 695.30
Haydee Flores 606.70 10.00 125.00 100.00 841.70
Marie Sarmiento 910.00 10.00 187.50 100.00 1,207.50
Total 2,002.00 30.00 412.50 300.00 2,744.50

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Payroll Accounting Module 1

To set up the employer’s share on the membership fee of the employees, the journal entry would
be:

Employer’s contribution 2,744.50

SSS Payable 2,002.00
EC Payable 30.00
PHIC Payable 412.50
Pag-ibig Payable 300.00
To record employer’s share

The journal entry to record the remittance to SSS, Philhealth, PAg-ibig, and BIR would entry
would be:

SSS Payable 3,102.00

PHIC Payable 825.00
EC Payable 30.00
Pag-ibig Payable 600.00
Withholding Tax Payable 5,032.07
Cash 9,589.07
Payment of withheld payables

Problem 1 
SSS Enterprises hired Ian Rey Pagaduan as an Accounting Clerk.  He accepted a monthly basic pay of P10,000.  For 
the first six months, it was a company policy that he will be under probationary employment status and as such 
will be paid on a daily basis.  No work no pay applies to him.   
 
Assuming that the company observes a 262 working days per year and Ian Rey works for 22 days for the month of  
January 2007 with 18 hours of overtime rendered,  compute his salary, net of all mandatory deductions. Ian is 
single. 
 
Problem 2 
 
ECC Corporation  provided the following information to you for computation of withholding taxes on 
compensation. Determine the taxes due A) in the absence of withholding tax table 2) Using the Monthly Tax 
Table 
 
Employee  Basic  SSS/HDMF 
Name  Status  Pay/Month  Overtime  SSS  PHIC  HDMF  Loans 
Casandra                           
Belista  Single  10,000.00   1,234.00   333.30  125.00  100.00   750.00  
                         
Noemi Lascona  M1  14,000.00   5,678.00   500.00  187.50  100.00   750.00  
               
Ellaisa Madrid  M3  12,000.00   2,345.00   400.00  150.00  100.00  
  
 
Explain which is more beneficial to both company and employees in relation to the preparation of payroll and the 
annualization of compensation at year‐end. 

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 Payroll Accounting Module 1

Problem 3 
Prepare the 1) payroll registers 2) remittance schedules 3) payment remittances (please use attached forms) for 
Cornerstone Inc. for the month of January 2007 using the payroll information below: 
 
Company Name: Cornerstone Inc 
Company Address :  2502Z Tektite East Tower, Exchange Road, Ortigas Pasig City 
TIN:  185‐003‐465‐000 
PHIC: 20‐047460145‐3 
SSS: 03‐9118146‐9 
 
All employees are monthly rated except for Larry Enriquez, the messenger who is paid at a rate  per day. Larry 
reported 19 days in January. Unauthorized absences and tardiness are deducted from payroll using 312 working 
days per  year.The company withholds all mandatory deductions and remits accordingly to the different agencies. 
 
Unauthorized 
Employee  Monthly  Reg OT  Restday  Absence (No  SSS/HDMF 
Name  Status  Rate  Hours  OT  Pay)  Tardiness  Loans 
Casandra            10 
Belista  Single  10,000.00   hours    8 hours    1 day    45 mins         350.00  
        
Noemi Lascona  M1  15,000.00    5 hours    8 hours    2 days    40 mins         350.00  
          24 
Ellaisa Madrid  M3  12,000.00   hours    8 hours    4 hours    35 mins         700.00  
 P350 per   15 
Larry Enriquez  M  day   hours              
 
Problem 4 
Case 1 
Jaime Legaspi is a Marketing and Research Staff at the C7C Advertising Inc and was hired on October 2006. He is 
single and is receiving P15,000 per month. On April 1, 2007 he tendered his resignation with effect  on April 30, 
2007.  Given the following information, provide the Final Pay computation for Jaime Legaspi and determine the 
following: 
a. Net Final Pay 
b. Taxable Income 
c. Taxes Payable (Refund) 
                             
    Earnings   Gross   Deductions    

   Basic  OT  Pay  HDMF   SSS   SSS Loan  PHIC   W/Tax   Net Pay 

                      
15‐Jan      7,500.00           7,500.00      50.00       250.00        75.00       416.00      6,709.00 
30‐Jan      7,500.00       8,750.95       23,750.00      50.00       250.00        75.00       416.00    25,459.95 
15‐Feb      7,500.00           7,500.00      50.00       250.00        75.00       416.00      6,709.00 
28‐Feb      7,500.00       9,385.85       17,885.85      50.00       250.00       525.00      75.00       416.00    16,569.85 
15‐Mar      7,500.00           7,500.00      50.00       250.00       262.50      75.00       416.00      6,446.50 
31‐Mar      7,500.00       8,760.26       22,260.26      50.00       250.00       262.50      75.00       416.00    21,206.76 
15‐Apr      7,500.00           7,500.00      50.00       250.00       262.50      75.00       416.00      6,446.50 
30‐Apr      7,500.00           7,500.00      50.00       250.00       262.50      75.00       416.00      6,446.50 
     60,000.00     26,897.06       86,897.06    400.00    2,000.00    1,575.00    600.00    3,328.00    95,994.06 

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Payroll Accounting Module 1

 
Additional Information: 
 
1. As of April 30, 2007 unpaid cash advance is P3,500 to be deducted from final pay. 
2. Regular overtime for April is 96 hours. C7C’s working days per year is 262 days and working hours of 
8 per day. 
 
Case 2 
 
Amor de Jesus is also a research staff from C7C Advertising Inc. She is also receiving P15,000 per month and is still 
Single.  She also tendered resignation effective on April 30, 2007.  Opposite to Jaime Legaspi, her basic pay for the 
Month of April was put on hold and will be released only after her reseignation effectivity. The following are her 
payroll registers from January – April of the current year. Compute for the final pay and determine the following: 
 
a. Net Final Pay 
b. Taxable Income 
c. Taxes Payable(Refund) 
 
 
                          
    Earnings   Gross   Deductions    
   Basic  Pay  HDMF   SSS   SSSLoan  PHIC   W/Tax   Net Pay 
                    
15‐Jan      7,500.00         7,500.00       50.00        250.00      100.00       958.00       6,142.00 
30‐Jan      7,500.00         7,500.00       50.00        250.00      100.00       635.00       6,465.00 
15‐Feb      7,500.00         7,500.00       50.00        250.00      100.00       645.00       6,455.00 
28‐Feb      7,500.00         7,500.00       50.00        250.00       525.00     100.00       956.00       5,619.00 
15‐Mar      7,500.00         7,500.00       50.00        250.00       262.50     100.00       362.00       6,475.50 
31‐Mar      7,500.00         7,500.00       50.00        250.00       262.50     100.00       441.00       6,396.50 
     45,000.00       45,000.00     300.00     1,500.00    1,050.00     600.00    3,997.00    37,553.00 
 
Case 3 
 
Tricia works as an executive assistant of Cola Cola Bottlers, Inc.  She receives the minimum rate of P350 per day 
for the eight hour work.  The following are the timekeeping summary for the cut off period from April 1‐30, 2007. 
 
  8:00 AM  ‐     5:00 PM    214 hours 
  5:00 PM  ‐    10:00PM    46 hours   
  10:00 PM ‐   11:00PM    17 hours  
 
The summary includes Tricia’s 8 hours work on April 9, 2007. 
 
Additional Information: 
  Employee Name :  Tricia Bernardo  E076 
  Status:      Single 
  TIN:      123‐456‐789‐000 
 
 
 

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Payroll Accounting Module 1

Requirements: 
 
1. Compute Tricia’s payroll for April.  
2. Determine the SSS, PHIC, HDMF and withholding tax dues for both employee and employer. Monthly 
workings for purposes of establishing salary bracket is 26 days 
3. Provide the journal entries for the computation including the recognition/accrual of employer share 
in the statutory deductions. 
 
Case 4 
 
Elena works as an accounting assistant of Cola Cola Bottlers, Inc.  She is being paid for a monthly rate of P15,000.  
The following are the timekeeping summary for the cut off period from April 1‐30, 2007. 
 
  5:00PM ‐  10:00PM      46 hours   
  10:00PM ‐ 11:00PM      17 hours  
  Lates/Undertime      3 hours   
 
Elena enjoyed the holiday at home. 
 
Additional Information: 
  Employee Name:  Elena Cruz E067 
  Status:      Single 
  TIN:      456‐789‐000‐000 
 
Requirements: 
 
1. Compute Elena’s payroll for April assuming that the company’s working days per year is 262.  
2. Determine the SSS, PHIC, HDMF and withholding tax dues for both employee and employer. 
3. Provide the journal entries for the computation including the recognition/accrual of employer share 
in the statutory deductions. 
 
Case 5 
 
Year‐end activities in payroll preparation includes the annualization of salaries to determine the year end 
adjustments.  Company B would like to qualify in the substituted filing of Income tax Returns.  To qualify, the tax 
due of the employees must be equal to the amount of tax deducted and remitted by the employer. 
 
Below are two payroll summaries. Check and compute the following: 
 
1. 13th month pay, assume release date is December 31, payroll. 
2. Taxes due for the year 
3. Tax Payable or Refund to be included in December 31 payroll 
4. Net Pay for December 31, 2007. 
 
 
 
 
 
 
 

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Payroll Accounting Module 1

Summary 1    Employee is Head of the Family with (One) qualified dependent 
 
Pay  Employee   Regular W/Tax  SSS,PHIC   Net Pay
Out   Name   HDMF Cont  
15‐Jan   Mica Cruz       4,250.00             154.00              233.35          3,862.65  
30‐Jan   Mica Cruz       4,250.00             154.00              233.35          3,862.65  
15‐Feb   Mica Cruz       4,250.00             154.00              233.35          3,862.65  
28‐Feb   Mica Cruz       4,250.00             154.00              233.35          3,862.65  
15‐Mar   Mica Cruz       4,250.00             154.00              233.35          3,862.65  
30‐Mar   Mica Cruz       4,250.00             154.00              233.35          3,862.65  
15‐Apr   Mica Cruz       4,250.00             154.00              233.35          3,862.65  
30‐Apr   Mica Cruz       4,250.00             154.00              233.35          3,862.65  
15‐May   Mica Cruz       4,250.00             154.00              233.35          3,862.65  
30‐May   Mica Cruz       4,250.00             154.00              233.35          3,862.65  
15‐Jun   Mica Cruz       4,250.00    ???              233.35    ???  
        46,750.00          1,540.00           2,566.85        38,626.50  
 
Summary 2 Employee is single 
 
Pay  Employee   Regular SSS W/Tax  SSS,PHIC   Net Pay
Out   Name    Loan  HDMF Cont  
15‐Jan   Angel Locsin          4,250.00        328.13        308.00             393.75               3,220.13 
30‐Jan   Angel Locsin          4,250.00        328.13        308.00             393.75               3,220.13 
15‐Feb   Angel Locsin          4,250.00        328.13        308.00             393.75               3,220.13 
28‐Feb   Angel Locsin          4,250.00        328.13        308.00             393.75               3,220.13 
15‐Mar   Angel Locsin          4,250.00        328.13        308.00             393.75               3,220.13 
30‐Mar   Angel Locsin          4,250.00        328.13        308.00             393.75               3,220.13 
15‐Apr   Angel Locsin          4,250.00        328.13        308.00             393.75               3,220.13 
30‐Apr   Angel Locsin          4,250.00        328.13        308.00             393.75               3,220.13 
15‐May   Angel Locsin          4,250.00        328.13        308.00             393.75               3,220.13 
30‐May   Angel Locsin          4,250.00        328.13        308.00             393.75               3,220.13 
15‐Jun   Angel Locsin          4,250.00        328.13        308.00             393.75               3,220.13 
30‐Jun   Angel Locsin          4,250.00        328.13        308.00             393.75               3,220.13 
15‐Jul   Angel Locsin          4,250.00        328.13        308.00             393.75               3,220.13 
30‐Jul   Angel Locsin          4,250.00        328.13        308.00             393.75               3,220.13 
15‐Aug   Angel Locsin          4,250.00        328.13        308.00             393.75               3,220.13 
30‐Aug   Angel Locsin          4,250.00        328.13        308.00             393.75               3,220.13 
15‐Sep   Angel Locsin          4,250.00        328.13        308.00             393.75               3,220.13 
30‐Sep   Angel Locsin          4,250.00        328.13        308.00             393.75               3,220.13 
15‐Oct   Angel Locsin          4,250.00        328.13        308.00             393.75               3,220.13 
30‐Oct   Angel Locsin          4,250.00        328.13        308.00             393.75               3,220.13 
15‐Nov   Angel Locsin          4,250.00        328.13        308.00             393.75               3,220.13 
30‐Nov   Angel Locsin          4,250.00        328.13        308.00             393.75               3,220.13 
15‐Dec   Angel Locsin          4,250.00        328.13        308.00             393.75               3,220.13 
30‐Dec   Angel Locsin          4,250.00        328.13  ????             393.75   ??? 
         102,000.00       7,875.00       7,084.00            9,450.00             74,062.88  
 
 
 

7
 CERTIFIED ACCOUNTING TECHNICIAN

INSTRUCTION TO CANDIDATES

SAMPLE EXAM

1. CANDIDATE ID NO./NAME …………………………………………………………...

2. This is a FINAL paper.

3. This paper consists of 2 pages. PLEASE CHECK BEFORE COMMENCING.
4. Please read the problem and the instructions carefully.
5. You are given 2 hours to read, comprehend, and solve the problem.
6. All required solutions must be presented in the answer sheets/forms provided.
7. Electronic hand held calculators are permitted.
8. Use black pen.

PART 2 - PAYROLL

Illustration:

Payroll Experts Inc is a firm engaged in payroll outsourcing activities. On January 10, 2007 you are hired by
the company as one of its Payroll Accountants. To start with, a client named Genesis International Corporation
was assigned to you.

The following are the information available for your review and processing:

I. Company Information

Registered Name: Genesis International Corporation

Address: Unit 001 Ground Floor, Taipan Place, Emerald Avenue, Ortigas Center, Pasig City
SSS Registration No. 33-6273488-9
PHIC: 20-0174301859
TIN No. 875-665-444-000
RDO No. 43

Signatory: Patricia Lopez, Accounting Manager

II. Payroll Policies

i. Equivalent Daily Rate is computed using 26 days per month.

ii. Tardiness and under time are deducted from payroll immediately
iii. Only authorized absences are entitled to payments.

Certified Accounting Technician Examination (Part 2 – Payroll) 1

iv. Overtime rates are as follows:

Special Holiday (SH) – 30% premium

Legal Holiday (LH) – 100% premium
Regular Overtime (OTRE) – 125% premium
Night Shift Differential (ND) – 10% premium of OT rate

III. Employee Master file

(See attached Annex 1)

IV. Timekeeping and other Payroll Instructions

(See attached Annex 2)

Requirements:
1) Compute the payroll of Genesis International Corp. Including the SSS, EC, PHIC, HDMF and withholding
taxes on compensation. Refer to the attached table for base salary and rates. Note that for HDMF
contribution, the rate to be used is Php100 for employee share and Php100 for employer share.
2) Prepare the required schedule and the returns of the following remittances:

Social Security System - R-5 Contributions Payment Return

- ML – 1 Monthly Salary Loan Payment Return
PHIC - ME-5 Contribution Payment Return
HDMF - Membership Remittance Form

BIR - 1601-C Withholding taxes on Compensation

Certified Accounting Technician Examination (Part 2 – Payroll) 2

GENESIS INTERNATIONAL CORPORATION
3/F 116 VA Rufino Street Legaspi Village Makati City
EMPLOYEE MASTER FILE REPORT AS OF December 2006

Annex 1

Employee Last
Number Name First Name Middle Name Sex Tax Type Job Description Birth date

092802-0001 ABELLA LIZA L. F S CASHIER 09/28/78

121801-0001 ALANO EDMOND S. M S ACCOUNTING ASSISTANT 12/18/75
082502-0002 ANTONIO MARY ANN N. F S GAMING ASSISTANT 08/25/79
101202-0001 DE VERA EVALYN A. F HF CASHIER 10/12/80
111702-0001 BELEN MARA C F S GAMING ASSISTANT 11/17/79
072202-0004 CRUZ MAY T. T. F S CUSTOMER SERVICE REPRESENTATIV 07/22/79
122001-0001 LIGON SYREN L. F M RECRUITMENT & PERSONNEL OFFICE 12/20/77
060500-0002 QUINTOS IZIEL N. F S CUSTOMER SERVICE SUPERVISOR 06/05/76
071800-0005 PEREZ JULIUS P. M M1 ACCOUNTING HEAD 07/18/75

Employee
Employee Last Bank REGULARIZATION Departmen
Number Name Account DATE Employee Class t Employee Cost Center Gross Rate

092802-0001 ABELLA 1200054413 CONTRACTUAL POSR POSR 350.00

121801-0001 ALANO 1200044671 06/18/04 REGULAR ACCTG ADMIN 10,000.00
082502-0002 ANTONIO 1200053425 CONTRACTUAL MRKTG MRKTG 350.00
101202-0001 DE VERA 1200047913 CONTRACTUAL MRKTG MRKTG 350.00
111702-0001 BELEN 1200048812 CONTRACTUAL MRKTG MRKTG 350.00
072202-0004 CRUZ 1200026398 01/22/03 PROBATIONARY CS MRKTG 12,000.00
122001-0001 LIGON 1200044760 06/20/02 REGULAR ADMIN ADMIN 14,000.00
060500-0002 QUINTOS 90075250 12/05/01 REGULAR CS MRKTG 15,000.00
071800-0005 PEREZ 1200014160 01/18/00 REGULAR ACCTG ADMIN 20,000.00

Employee Last Type of OTENTITL

Number Name Hourly Rate Allowance Allowance ED PYFREQUENCY PYTYPE

092802-0001 ABELLA 37.50 50.00 ECOLA Y SEMI-MONTHLY DAILY

121801-0001 ALANO 48.08 0.00 Y SEMI-MONTHLY MONTHLY
082502-0002 ANTONIO 37.50 50.00 ECOLA Y SEMI-MONTHLY DAILY
101202-0001 DE VERA 37.50 50.00 ECOLA Y SEMI-MONTHLY DAILY
111702-0001 BELEN 37.50 50.00 ECOLA Y SEMI-MONTHLY DAILY
072202-0004 CRUZ 57.69 0.00 ECOLA Y SEMI-MONTHLY MONTHLY
122001-0001 LIGON 67.31 0.00 N SEMI-MONTHLY MONTHLY
060500-0002 QUINTOS 72.12 0.00 N SEMI-MONTHLY MONTHLY
071800-0005 PEREZ 96.15 0.00 N SEMI-MONTHLY MONTHLY

Certified Accounting Technician Examination (Part 2 – Payroll) 3

 Annex 2
Attendance For Payroll Period: Jan. 15, 2007
Attendance Cut-Off: Dec. 26-Jan. 10, 2007

Timekeeping For Deductions

No. Last Name First Name No. of Reg. Working Days Tardy (mins) SH LH OTRE N.D. UA Company Loan SSS loan
1 ABELLA LIZA 11 55 8 8 4 17 - 250.00
2 ALANO EDMOND 12 42 4 6 5 25 - 560.00
3 ANTONIO MARY ANN 11 36 3 6 12 19 -
4 DE VERA EVALYN 11 11 5 6 16 24 - 300.00
5 BELEN MARA 10 8 8 6 11 39 - 250.00
6 CRUZ MAY T. 10 89 2 2 2 87 - 700.00
7 LIGON SYREN 12 - - - - - 2
8 QUINTOS IZIEL 12 - - - - - 1
9 PEREZ JULIUS 12 - - - - - -

Attendance For Payroll Period: Jan. 31, 2005

Attendance Cut-Off: January 11-25, 2005

Timekeeping For Deductions

No. Last Name First Name No. of Days Tardy (mins) SH LH OTRE N.D. UA Company Loan SSS loan
1 ABELLA LIZA 13 8 44 - 250.00
2 ALANO EDMOND 10 54 6 5 3 560.00
3 ANTONIO MARY ANN 13 160 5 17 -
4 DE VERA EVALYN 13 8 54 - 300.00
5 BELEN MARA 13 9 28 - 250.00
6 CRUZ MAY T. 13 11 - 700.00
7 LIGON SYREN 13
8 QUINTOS IZIEL 13 450.00
9 PEREZ JULIUS 13 6,000.00

Certified Accounting Technician Examination (Part 2 – Payroll) 4

 5678-9003-05

NAME: Crisostomo A. Tagapagtuos_____________ DATE: August 1, 2008___________

E-MAIL: topnotch_exam_passers@catmail.com__ MOBILE NO: 0917-8827111_______

EXAM PROVIDER: TOPNOTCH CAT REVIEWERS______ VENUE: NRC, MORAYTA, MANILA

INSTRUCTIONS TO EXAMINEES

1. This is a FINAL paper.

2. This paper consists of XX pages / XX sheets of paper / (Back to back). PLEASE CHECK THE
PAGES/PAPERS BEFORE COMMENCING ON YOUR EXAM.
3. Please read the problems and instructions carefully.
4. You are given FOUR (4) HOURS to read, comprehend, and solve the problems.
5. All required solutions must be presented in the answer sheets/forms provided.
6. Only regular or scientific calculators are permitted.
7. USE BLACK PEN.

CAT Examination Level 3 - Payroll and Taxation

PROBLEM – Payroll Accounting

The following are the employees of Tea-account Cafe:

Employee Monthly Salary Position Cash Advance Tax Status
Bryce Cookah 26,000 php Barista Single
Jeypee Yaa 32,500 php Accountant 1,500 php Married, 1 dependent
Ahrjhey T. Vee 48,500 php Supervisor Married, 2 dependents

Assuming that withholding tax will be withheld every time a payroll sheet is prepared, while all the other
contributions are withheld only once from the payroll nearest the end of the month on the basis of the
monthly gross compensation. Cash advances are deducted at the second cut-off period.

Required:
a. Prepare a payroll sheet for the first half of July. (X pts)
b. Prepare a payroll sheet for the second half of July. (X pts)
c. Compute for the employer’s contribution and liabilities. (X pts)
d. Prepare the journal entries for the 2 payroll cut-offs for July and remittances to different
agencies on August 10. (X pts)

CAT Examination Level 3 Page 1

Sample Exams of Topnotch CAT Reviewers. For discussion purposes only.
Questions and problems in this material DO NOT REPRESENT the actual CAT exam questions/problems.
PROBLEM – Payroll Registers
Prepare the 1. Payroll registers (XX pts); 2. Remittance schedules (XX pts); 3. Payroll entries (XX pts) for
Lubi Lubi Inc. for the month of January 2014 using the payroll information below:
Company Name: Lubi Lubi Inc.
Company Address: Banawe St., Sta. Mesa Heights, Quezon City
PHIC: 10-601450474-8
SSS: 02-8146911-6

All employees are monthly rated except for Julio Augusto, the messenger who is paid at a rate per day.
Julio reported 19 days in January. Unauthorized absences and tardiness are deducted from payroll using
312 working days per year. The company withholds all mandatory deductions and remits accordingly to
the different agencies.
Employee Status Monthly Reg. OT Restday Unathorized Tardiness SSS/HDMF
Name Rate Hours OT Absence Loans
(No Pay)
April Summers Single 14,000.00 10 hrs. 8 hrs. 1 day 45 mins. 350.00
May Flowers M1 17,000.00 5 hrs. 8 hrs. 2 days 40 mins. 350.00
June Brides M3 22,000.00 24 hrs. 8 hrs. 4 hours 35 mins. 700.00
Julio Augusto M P450/day 15 hrs.

SUMMARY OF CONTRIBUTIONS
FOR THE MONTH OF JANUARY 2014
SOCIAL SECURITY SYSTEM
NAME EMPLOYEE’S EMPLOYER’S EC TOTAL
SHARE SHARE
April Summers
May Flowers
June Brides
Julio Augusto
TOTAL

PHILIPPINE HEALTH INSURANCE CORPORATION

NAME EMPLOYEE’S SHARE EMPLOYER’S SHARE TOTAL
April Summers
May Flowers
June Brides
Julio Augusto
TOTAL

HOME DEVELOPMENT MUTUAL FUND (PAG-IBIG)

NAME EMPLOYEE’S SHARE EMPLOYER’S SHARE TOTAL
April Summers
May Flowers
June Brides
Julio Augusto
TOTAL

CAT Examination Level 3 Page 2

Sample Exams of Topnotch CAT Reviewers. For discussion purposes only.
Questions and problems in this material DO NOT REPRESENT the actual CAT exam questions/problems.
BUREAU OF INTERNAL REVENUE
NAME TAX WITHELD
April Summers
May Flowers
June Brides
Julio Augusto
TOTAL

DATE ACCOUNTS & EXPLANATION F DEBIT CREDIT

2014

CAT Examination Level 3 Page 3

Sample Exams of Topnotch CAT Reviewers. For discussion purposes only.
Questions and problems in this material DO NOT REPRESENT the actual CAT exam questions/problems.
PAYROLL REGISTER
FOR JANUARY 2014
NAME TC DAYS LEAVE TARDINESS OT-REG REST DAILY MONTHLY LEAVE TARDINESS
WORKED W/O 125% DAY OT RATE RATE W/O
PAY (hrs) 130% PAY
(hrs) BASIC Regular
pay

1 April Summers S 1 45 10 8
2 May Flowers M1 2 40 5 8
3 June Brides M3 0.5 35 24 8
4 Julio Augusto M 19 15

19 3.5 120 54 24

PAYROLL REGISTER
FOR JANUARY 2014
NAME OT-REG REST GROSS SSS PHIC HDMF W/TAX SSS Loan TOTAL NET PAY
125% DAY OT PAY WAGES DEDUCTION
(hrs) 130%
(hrs)

1 April Summers
2 May Flowers
3 June Brides
4 Julio Augusto

CAT Examination Level 3 Page 4

Sample Exams of Topnotch CAT Reviewers. For discussion purposes only.
Questions and problems in this material DO NOT REPRESENT the actual CAT exam questions/problems.