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	$9,270
213	Medicare Tax Payable	2,306
214	Employees Federal Income Tax Payable	15,470
215	Employees State Income Tax Payable	13,918
216	State Unemployment Tax Payable	1,380
217	Federal Unemployment Tax Payable	470
218	Bond Deductions Payable	$4,000
219	Medical Insurance Payable	19,800
411	Operations Salaries Expense	980,000
511	Officers Salaries Expense	620,000
512	Office Salaries Expense	160,000
519	Payroll Tax Expense	135,951

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 $4,000 to Jay Bank to purchase U.S. savings bonds for employees.
	2	Issued Check No. 411 to Jay Bank for $27,046 in payment of $9,270 of social security tax, $2,306 of Medicare tax, and $15,470 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	$41,200
Officers	26,000
Office	6,000	$73,200
Deductions:
Social security tax	$ 4,392
Medicare tax	1,098
Federal income tax withheld	14,640
State income tax withheld	3,294
Savings bond deductions	2,000
Medical insurance deductions	3,300	28,724
Net amount		$44,476

	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, $4,392; Medicare tax, $1,098; state unemployment tax, $330; federal unemployment tax, $105.
	16	Issued Check No. 424 to Jay Bank for $25,620, in payment of $8,784 of social security tax, $2,196 of Medicare tax, and $14,640 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	$40,800
Officers	26,800
Office	6,200	$73,800
Deductions:
Social security tax	$ 4,428
Medicare tax	1,107
Federal income tax withheld	14,604
State income tax withheld	3,321
Savings bond deductions	2,000	25,460
Net amount		$48,340

	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, $4,428; Medicare tax, $1,107; state unemployment tax, $230; federal unemployment tax, $60.
	27	Issued Check No. 543 for $20,533 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 $4,000 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, $8,550; officers salaries, $5,570; office salaries, $1,440. The payroll taxes are immaterial and are not accrued. B. Vacation pay, $15,200. CHART OF ACCOUNTS Garcon Co. General Ledger ASSETS 110 Cash 111 Accounts Receivable 112 Interest Receivable 113 Notes Receivable 115 Merchandise Inventory 116 Supplies 118 Prepaid Insurance 120 Land 123 Building 124 Accumulated Depreciation-Building 125 Office Equipment 126 Accumulated Depreciation-Office Equipment LIABILITIES 210 Accounts Payable 211 Salaries Payable 212 Social Security Tax Payable 213 Medicare Tax Payable 214 Employees Federal Income Tax Payable 215 Employees State Income Tax Payable 216 State Unemployment Tax Payable 217 Federal Unemployment Tax Payable 218 Bond Deductions Payable 219 Medical Insurance Payable 220 Interest Payable 221 Notes Payable 226 Vacation Pay Payable 227 Unfunded Pension Liability 228 Product Warranty Payable EQUITY 310 Owner, Capital 311 Owner, Drawing 312 Income Summary 1. Journalize the transactions on pages 10 and 11 of the journal. Refer to the Chart of Accounts for exact wording of account titles. Scroll down to access pages 11 and 12 of the journal. PAGE 10 JOURNAL DATE DESCRIPTION POST. REF. DEBIT CREDIT 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 PAGE 11 JOURNAL DATE DESCRIPTION POST. REF. DEBIT CREDIT 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 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, $8,550; officers salaries, $5,570; office salaries, $1,440. The payroll taxes are immaterial and are not accrued. B. Vacation pay, $15,200. PAGE 12 JOURNAL DATE DESCRIPTION POST. REF. DEBIT CREDIT 1 Adjusting Entries 2 3 4 5 6 7

Answer 1