CHART OF ACCOUNTSGarcon Co.General Ledger ASSETS 110 Cash 111 Accounts Receivable 112 Interest Receivable 113 Notes Receivable 115 Inventory 116 Supplies 118 Prepaid Insurance 120
CHART OF ACCOUNTSGarcon Co.General Ledger
| | ASSETS |
| 110 | Cash |
| 111 | Accounts Receivable |
| 112 | Interest Receivable |
| 113 | Notes Receivable |
| 115 | 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 | Common Stock |
| 311 | Retained Earnings |
| 312 | Dividends |
| | REVENUE |
| 410 | Sales |
| 610 | Interest Revenue |
| | EXPENSES |
| 510 | Cost of Goods Sold |
| 511 | Officers Salaries Expense |
| 512 | Office Salaries Expense |
| 513 | Operations Salaries Expense |
| 519 | Payroll Tax Expense |
| 524 | Depreciation Expense-Building |
| 525 | Delivery Expense |
| 526 | Repairs Expense |
| 529 | Selling Expenses |
| 531 | Rent Expense |
| 532 | Depreciation Expense-Office Equipment |
| 533 | Insurance Expense |
| 534 | Supplies Expense |
| 536 | Vacation Pay Expense |
| 537 | Pension Expense |
| 538 | Cash Short and Over |
| 539 | Product Warranty Expense |
| 540 | Miscellaneous Expense |
| 710 | Interest Expense |
he 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 | $9,273 |
| 213 | Medicare Tax Payable | 2,318 |
| 214 | Employees Federal Income Tax Payable | 15,455 |
| 215 | Employees State Income Tax Payable | 13,909 |
| 216 | State Unemployment Tax Payable | 1,400 |
| 217 | Federal Unemployment Tax Payable | 500 |
| 218 | Bond Deductions Payable | 3,400 |
| 219 | Medical Insurance Payable | 27,000 |
| 411 | Operations Salaries Expense | 950,000 |
| 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 $3,400 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 $9,273 of social security tax, $2,318 of Medicare tax, and $15,455 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 | $43,200 | |
| Officers | 27,200 | |
| Office | 6,800 | $77,200 |
| Deductions: | | |
| Social security tax | $ 4,632 | |
| Medicare tax | 1,158 | |
| Federal income tax withheld | 15,440 | |
| State income tax withheld | 3,474 | |
| Savings bond deductions | 1,700 | |
| Medical insurance deductions | 4,500 | 30,904 |
| Net amount | | $46,296 |
| | 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, $4,632; Medicare tax, $1,158; state unemployment tax, $350; federal unemployment tax, $125. |
| | 16 | Issued Check No. 424 to Jay Bank for $27,020, in payment of $9,264 of social security tax, $2,316 of Medicare tax, and $15,440 of employees federal income tax due. |
| | 19 | Issued Check No. 429 to Sims-Walker Insurance Company for $31,500 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 | $42,800 | |
| Officers | 28,000 | |
| Office | 7,000 | $77,800 |
| Deductions: | | |
| Social security tax | $ 4,668 | |
| Medicare tax | 1,167 | |
| Federal income tax withheld | 15,404 | |
| State income tax withheld | 3,501 | |
| Savings bond deductions | 1,700 | 26,440 |
| Net amount | | $51,360 |
| | 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, $4,668; Medicare tax, $1,167; state unemployment tax, $225; federal unemployment tax, $75. |
| | 27 | Issued Check No. 543 for $20,884 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 $45,000 to the employee pension plan. The annual pension cost is $60,000. (Record both the payment and unfunded pension liability.) |
| | Required: |
| 1. | Journalize the transactions on pages 10 and 11 of the journal. |
| 2. | On page 12 of the journal, journalize the following adjusting entries on December 31: | a. | Salaries accrued: operations salaries, $8,560; officers salaries, $5,600; office salaries, $1,400. The payroll taxes are immaterial and are not accrued. | | b. | Vacation pay, $15,000. | |
