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	2,316
214	Employees Federal Income Tax Payable	15,405
215	Employees State Income Tax Payable	13,920
216	State Unemployment Tax Payable	1,440
217	Federal Unemployment Tax Payable	430
218	U.S. Saving Bond Deductions Payable	$3,200
219	Medical Insurance Payable	24,600
411	Operations Salaries Expense	940,000
511	Officers Salaries Expense	640,000
512	Office Salaries Expense	150,000
519	Payroll Tax Expense	136,151

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 $3,200 to Jay Bank to purchase U.S. savings bonds for employees.
	2	Issued Check No. 411 to Jay Bank for $27,001 in payment of $9,280 of social security tax, $2,316 of Medicare tax, and $15,405 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	$40,600
Officers	27,000
Office	6,400	$74,000
Deductions:
Social security tax	$ 4,440
Medicare tax	1,110
Federal income tax withheld	14,800
State income tax withheld	3,330
Savings bond deductions	1,600
Medical insurance deductions	4,100	29,380
Net amount		$44,620

	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, $4,440; Medicare tax, $1,110; state unemployment tax, $350; federal unemployment tax, $110.
	16	Issued Check No. 424 to Jay Bank for $25,900, in payment of $8,880 of social security tax, $2,220 of Medicare tax, and $14,800 of employees’ federal income tax due.
	19	Issued Check No. 429 to Sims-Walker Insurance Company for $28,700 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	$40,200
Officers	27,800
Office	6,600	$74,600
Deductions:
Social security tax	$ 4,476
Medicare tax	1,119
Federal income tax withheld	14,764
State income tax withheld	3,357
Savings bond deductions	1,600	25,316
Net amount		$49,284

	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, $4,476; Medicare tax, $1,119; state unemployment tax, $220; federal unemployment tax, $80.
	27	Issued Check No. 543 for $20,607 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 $3,200 to purchase U.S. savings bonds for employees.
	31	Paid $48,000 to the employee pension plan. The annual pension cost is $64,000. (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, $8,570; officers salaries, $5,610; office salaries, $1,380. The payroll taxes are immaterial and are not accrued. b. Vacation pay, $15,400.

Answer 1