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 2,320 214 Employees Federal Income Tax Payable 15,460 215 Employees State Income Tax Payable 13,908 216 State Unemployment Tax Payable 1,320 217 Federal Unemployment Tax Payable 550 218 Bond Deductions Payable $3,800 219 Medical Insurance Payable 19,800 411 Operations Salaries Expense 960,000 511 Officers Salaries Expense 600,000 512 Office Salaries Expense 150,000 519 Payroll Tax Expense 137,951 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 $3,800 to Jay Bank to purchase U.S. savings bonds for employees. 2 Issued Check No. 411 to Jay Bank for $27,060 in payment of $9,280 of social security tax, $2,320 of Medicare tax, and $15,460 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 $41,000 Officers 27,600 Office 6,400 $75,000 Deductions: Social security tax $ 4,500 Medicare tax 1,125 Federal income tax withheld 15,000 State income tax withheld 3,375 Savings bond deductions 1,900 Medical insurance deductions 3,300 29,200 Net amount $45,800 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, $4,500; Medicare tax, $1,125; state unemployment tax, $330; federal unemployment tax, $115. 16 Issued Check No. 424 to Jay Bank for $26,250, in payment of $9,000 of social security tax, $2,250 of Medicare tax, and $15,000 of employees’ federal income tax due. 19 Issued Check No. 429 to Sims-Walker Insurance Company for $23,100 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 $40,600 Officers 28,400 Office 6,600 $75,600 Deductions: Social security tax $ 4,536 Medicare tax 1,134 Federal income tax withheld 14,964 State income tax withheld 3,402 Savings bond deductions 1,900 25,936 Net amount $49,664 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, $4,536; Medicare tax, $1,134; state unemployment tax, $230; federal unemployment tax, $65. 27 Issued Check No. 543 for $20,685 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 $3,800 to purchase U.S. savings bonds for employees. 31 Paid $51,000 to the employee pension plan. The annual pension cost is $68,000. (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, $8,540; officers salaries, $5,640; office salaries, $1,390. The payroll taxes are immaterial and are not accrued. B. Vacation pay, $14,700.

Answer 1