Question

The following accounts, with the balances indicated, appear in the ledger of Garcon Co. on December 1 of the current year:

Account No.	Account Name	Balance
211	Salaries Payable	—
212	Social Security Tax Payable	$9,280
213	Medicare Tax Payable	2,302
214	Employees Federal Income Tax Payable	15,430
215	Employees State Income Tax Payable	13,912
216	State Unemployment Tax Payable	1,340
217	Federal Unemployment Tax Payable	480
218	Bond Deductions Payable	$3,400
219	Medical Insurance Payable	22,200
411	Operations Salaries Expense	920,000
511	Officers Salaries Expense	640,000
512	Office Salaries Expense	160,000
519	Payroll Tax Expense	136,551

The following transactions relating to payroll, payroll deductions, and payroll taxes occurred during December:

On page 10 of the journal:

Dec.	2	Issued Check No. 410 for $3,400 to Jay Bank to purchase U.S. savings bonds for employees.
	2	Issued Check No. 411 to Jay Bank for $27,012 in payment of $9,280 of social security tax, $2,302 of Medicare tax, and $15,430 of employees’ federal income tax due.
	13	Journalized the entry to record the biweekly payroll. A summary of the payroll record follows:

Salary distribution:
Operations	$42,400
Officers	26,000
Office	6,800	$75,200
Deductions:
Social security tax	$ 4,512
Medicare tax	1,128
Federal income tax withheld	15,040
State income tax withheld	3,384
Savings bond deductions	1,700
Medical insurance deductions	3,700	29,464
Net amount		$45,736

	13	Issued Check No. 420 in payment of the net amount of the biweekly payroll.
	13	Journalized the entry to record payroll taxes on employees’ earnings of December 13: social security tax, $4,512; Medicare tax, $1,128; state unemployment tax, $350; federal unemployment tax, $115.
	16	Issued Check No. 424 to Jay Bank for $26,320, in payment of $9,024 of social security tax, $2,256 of Medicare tax, and $15,040 of employees’ federal income tax due.
	19	Issued Check No. 429 to Sims-Walker Insurance Company for $25,900 in payment of the semiannual premium on the group medical insurance policy.

On page 11 of the journal:

Dec.

27

Journalized the entry to record the biweekly payroll. A summary of the payroll record follows:

Salary distribution:
Operations	$42,000
Officers	26,800
Office	7,000	$75,800
Deductions:
Social security tax	$ 4,548
Medicare tax	1,137
Federal income tax withheld	15,004
State income tax withheld	3,411
Savings bond deductions	1,700	25,800
Net amount		$50,000

	27	Issued Check No. 541 in payment of the net amount of the biweekly payroll.
	27	Journalized the entry to record payroll taxes on employees’ earnings of December 27: social security tax, $4,548; Medicare tax, $1,137; state unemployment tax, $210; federal unemployment tax, $70.
	27	Issued Check No. 543 for $20,707 to State Department of Revenue in payment of employees’ state income tax due on December 31.
	31	Issued Check No. 545 to Jay Bank for $3,400 to purchase U.S. savings bonds for employees.
	31	Paid $60,000 to the employee pension plan. The annual pension cost is $80,000. (Record both the payment and unfunded pension liability.)

	Required:
1.	Journalize the transactions on pages 10 and 11 of the journal. Refer to the Chart of Accounts for exact wording of account titles.
2.	On page 12 of the journal, journalize the following adjusting entries on December 31 (refer to the Chart of Accounts for exact wording of account titles): a. Salaries accrued: operations salaries, $8,590; officers salaries, $5,560; office salaries, $1,450. The payroll taxes are immaterial and are not accrued. b. Vacation pay, $15,000.

Answer 1

Date	General Journal	Debit	Credit
2-Dec	Bond Deductions payable	3400
	Cash		3400
2-Dec	social security tax payable	9,280
	Medi care tax payable	2,302
	Employees federal Income tax payable	15,430
	Cash		27,012
13-Dec	Sales Salary Expense	42,400
	Officers Salaries Expense	26,000
	Office Salaries Expense	6,800
	social security tax payable		4,512
	Medi care tax payable		1,128
	Employees federal Income tax payable		15,040
	Employees State Income tax payable		3,384
	Bond Deductions payable		1,700
	Medi care iinsurance payable		3,700
	Salaries Paayble		45,736
13-Dec	Salaries Paayble	45,736
	Cash		45,736
13-Dec	Pay roll tax expense	6,105
	social security tax payable		4,512
	Medi care tax payable		1,128
	State Unemployment tax payable		350
	Federal Unemployment tax payable		115
16-Dec	social security tax payable	$9,024
	Medi care tax payable	2,256
	Employees federal Income tax payable	15,040
	Cash		$26,320
19-Dec	Medical insurance payable	25900
	Cash		25900
27-Dec	Sales Salary Expense	42,000
	Officers Salaries Expense	26,800
	Office Salaries Expense	7,000
	social security tax payable		4,548
	Medi care tax payable		1,137
	Employees federal Income tax payable		15,004
	Employees State Income tax payable		3,411
	Bond Deductions payable		1,700
	Salaries Paayble		50,000
27-Dec	Salaries Paayble	50,000
	Cash		50,000
27-Dec	Pay roll tax expense	5965
	social security tax payable		4548
	Medi care tax payable		1,137
	State Unemployment tax payable		210
	Federal Unemployment tax payable		70
27-Dec	Employees state income tax payable	20,707
	Cash		20,707
31-Dec	Bond deduction payable	3,400
	Cash		3,400
31-Dec	Pension Expense	80,000
	Cash		60,000
	unfunded pension liability		20,000
31-Dec	Sales Salary Expense	8,590
	Officers Salaries Expense	$5,560
	Office Salaries Expense	1,450
	Salaries Payable		15,600
	Accurued wages for the period
31-Dec	Vacation pay expense	15000
	Vacation pay payable		15000
	Vaccation pay accrued for the period