Question

Payroll Accounts and Year-End Entries

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

211	Salaries Payable	—
212	Social Security Tax Payable	$17,328
213	Medicare Tax Payable	4,560
214	Employees Federal Income Tax Payable	28,120
215	Employees State Income Tax Payable	27,360
216	State Unemployment Tax Payable	2,888
217	Federal Unemployment Tax Payable	912
218	Bond Deductions Payable	7,000
219	Medical Insurance Payable	52,900
411	Operations Salaries Expense	1,841,000
511	Officers Salaries Expense	1,201,000
512	Office Salaries Expense	306,000
519	Payroll Tax Expense The following transactions relating to payroll, payroll deductions, and payroll taxes occurred during December: Dec. 2 Issued Check No. 410 for $ 7,000 to Jay Bank to purchase U.S. savings bonds for employees. Dec. 2 Issued Check No. 411 to Jay Bank for $ 50,008 in payment of $17,328 of social security tax, $4,560 of Medicare tax, and $28,120 of employees' federal income tax due. Dec. 13 Journalized the entry to record the biweekly payroll. A summary of the payroll record follows: Salary distribution:    Operations $83,000    Officers 55,000    Office 14,000 152,000 Deductions:    Social security tax 9,120    Medicare tax 2,280    Federal income tax withheld 28,120    State income tax withheld 6,840    Savings bond deductions 3,500 Medical insurance deductions 8,816 58,676 Net amount 93,324 Dec. 13 Issued Check No. 420 in payment of the net amount of the biweekly payroll. Dec. 13 Journalized the entry to record payroll taxes on employees' earnings of December 13: social security tax, $9,120; Medicare tax, $2,280; state unemployment tax, $720; federal unemployment tax, $240. Dec. 16 Issued Check No. 424 to Jay Bank for $ 50,920, in payment of $18,240 of social security tax, $4,560 of Medicare tax, and $28,120 of employees' federal income tax due. Dec. 19 Issued Check No. 429 to Sims-Walker Insurance Company for $ 52,900, in payment of the semiannual premium on the group medical insurance policy. Dec. 27 Journalized the entry to record the biweekly payroll. A summary of the payroll record follows: Salary distribution:    Operations $81,000    Officers 55,000    Office 13,000 149,000 Deductions:    Social security tax 8,940    Medicare tax 2,235    Federal income tax withheld 27,267    State income tax withheld 6,705    Savings bond deductions 3,500 48,647 Net amount 100,353 Dec. 27 Issued Check No. 541 in payment of the net amount of the biweekly payroll. Dec. 27. Journalized the entry to record payroll taxes on employees' earnings of December 27: social security tax, $8,940; Medicare tax, $2,235; state unemployment tax, $360; federal unemployment tax, $120. Dec. 27 Issued Check No. 543 for $ 40,905 to State Department of Revenue in payment of employees' state income tax due on December 31. Dec. 31 Issued Check No. 545 to Jay Bank for $ 7,000 to purchase U.S. savings bonds for employees. Dec. 31 Paid $80,000 to the employee pension plan. The annual pension cost is $104,000. (Record both the payment and unfunded pension liability.) Required: 1. Journalize the transactions. If an amount box does not require an entry, leave it blank. For December 13th transactions, (a.) record the payroll and (b.) payment of salaries. For December 27th transactions, (a.) record the payroll, (b.) payment of salaries, (c.) record the taxes, and (d.) payment of taxes. Date Account Debit Credit Dec. 2 Dec. 2 Dec. 13 (a.) Dec. 13 (b.) Dec. 13-Taxes Dec. 16-Taxes Dec. 19-Ins. Dec. 27 (a.) Dec. 27 (b.) Dec. 27 (c.) Dec. 27 (d.) Dec. 31-Bonds Dec. 31 2a. Journalize the following adjusting entry on December 31. Salaries accrued: operations salaries, $8,100; officers salaries, $5,500; office salaries, $1,300 . The payroll taxes are immaterial and are not accrued. If an amount box does not require an entry, leave it blank. Date Account Debit Credit Dec. 31 2b. Journalize the following adjusting entry on December 31: Vacation pay, $28,000. Date Account Debit Credit Dec. 31	261,440

Answer 1