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 $11,058 213 Medicare Tax Payable 2,910 214 Employees Federal Income Tax Payable 17,945 17,460 215 Employees State Income Tax Payable 216 State Unemployment Tax Payable 1,843 217 Federal Unemployment Tax Payable 582 218 Retirement Savings Deductions Payable 4,000 219 Medical Insurance Payable 33,800 411 Operations Salaries Expense 1,175,000 511 Officers Salaries Expense 766,000 512 Office Salaries Expense 195,000 519 Payroll Tax Expense 166,840 The following transactions relating to payroll, payroll deductions, and payroll taxes occurred during December: Dec. 2. Issued Check No. 410 for $4,000 to Jay Bank to invest in a retirement savings account for employees. 2. Issued Check No. 411 to Jay Bank for $31,913 in payment of $11,058 of social security tax, $2,910 of Medicare tax, and $17,945 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 $54,000 Officers 34,000 Office 9,000 $97,000 Deductions: Social security tax $5,820 Medicare tax 1,455 Federal income tax withheld 17,945 4,365 State income tax withheld Retirement savings deductions 2,000 Medical insurance deductions 5,626 37,211 Net amount $59,789 13. Issued Check No. 420 in payment of the net amount of the biweekly payroll to fund the payroll bank account. 13. Journalized the entry to record payroll taxes on employees' earnings of December 13: social security tax, $5,820; Medicare tax, $1,455; state unemployment tax, $460; federal unemployment tax, $150. 16. Issued Check No. 424 to Jay Bank for $32,495, in payment of $11,640 of social security tax, $2,910 of Medicare tax, and $17,945 of employees' federal income tax due. 19. Issued Check No. 429 to Sims-Walker Insurance Company for $33,800, in payment of the semiannual premium on the group medical insurance policy. 27. Journalized the entry to record the biweekly payroll. A summary of the payroll record follows: Salary distribution: Operations $52,000 Officers 34,000 Office 8,000 $94,000 Deductions: Social security tax $5,640 Medicare tax 1,410 Federal income tax withheld 17,202 State income tax withheld 4,230 Retirement savings deductions 2,000 30,482 Net amount $63,518 27. Issued Check No. 541 in payment of the net amount of the biweekly payroll to fund the payroll bank account. 27. Journalized the entry to record payroll taxes on employees' earnings of December 27: social security tax, $5,640; Medicare tax, $1,410; state unemployment tax, $230; federal unemployment tax, $75. 27. Issued Check No. 543 for $26,055 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 invest in a retirement savings account for employees. 31. Paid $51,000 to the employee pension plan. The annual pension cost is $66,000. (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 16th transactions, (a.) record the payroll and (b.) payment of salaries. For December 30th transactions, (a.) record the payroll, (b.) payment of salaries, (c.) record the taxes, and (d.) payment of taxes. Date Account Debit Credit Retirement Savings Deductions Payable 4,000 Cash 4,000 Social Security Tax Payable 11,058 Medicare Tax Payable 2,910 Employees Federal Income Tax Payable 17,945 Cash 31,913 13 (a.) Operations Salaries Expense Officers Salaries Expense Office Salaries Expense Social Security Tax Payable Medicare Tax Payable Employees Federal Income Tax Payable Employees State Income Tax Payable 17,945 Retirement Savings Deductions Payable Medical Insurance Payable Salaries Payable 13 (b.) Salaries Payable Cash 13-Taxes Payroll Tax Expense Social Security Tax Payable Medicare Tax Payable State Unemployment Tax Payable Federal Unemployment Tax Payable 16-Taxes Social Security Tax Payable Medicare Tax Payable Employees Federal Income Tax Payable Cash 19-Ins. Medical Insurance Payable Cash Chapter 11: Problem Set eBook 27 (a.) Operations Salaries Expense Officers Salaries Expense Office Salaries Expense Social Security Tax Payable Medicare Tax Payable Employees Federal Income Tax Payable Employees State Income Tax Payable Retirement Savings Deductions Payable Salaries Payable >127 () Salaries Payable Cash 27 (c.) Payroll Tax Expense Social Security Tax Payable Medicare Tax Payable State Unemployment Tax Payable Federal Unemployment Tax Payable 27 (d) Employees State Income Tax Payable Cash 31-Bonds Retirement Savings Deductions Payable Cash 31 Pension Expense Cash Unfunded Pension Liability 2a. Journalize the following adjusting entry on December 31. Salaries accrued: operations salaries, $5,200; officers salaries, $3,400; office salaries, $800. 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 Operations Salaries Expense Officers Salaries Expense Office Salaries Expense Salaries Payable 2b. Journalize the following adjusting entry on December 31: Vacation pay, $17,900. If an amount box does not require an entry, leave it blank. Date Account Debit Credit 31 Vacation Pay Expense Vacation Pay Payable Feedback Check My Work Consider what taxes employees have to pay versus what taxes employers are required to pay. Employees' gross earnings have to be allocated to taxes, other deductions, and net pay. When paying a liability, what accounts would have to decrease? Recall that earned vacation time is an accrued expense adjustment