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	$16,074
213	Medicare Tax Payable	4,230
214	Employees Federal Income Tax Payable	26,085
215	Employees State Income Tax Payable	25,380
216	State Unemployment Tax Payable	2,679
217	Federal Unemployment Tax Payable	846
218	Retirement Savings Deductions Payable	6,000
219	Medical Insurance Payable	49,100
411	Operations Salaries Expense	1,708,000
511	Officers Salaries Expense	1,114,000
512	Office Salaries Expense	283,000
519	Payroll Tax Expense	242,520

The following transactions relating to payroll, payroll deductions, and payroll taxes occurred during December:

Dec. 2.

Issued Check No. 410 for $6,000 to Jay Bank to invest in a retirement savings account for employees.

2.

Issued Check No. 411 to Jay Bank for $46,389 in payment of $16,074 of social security tax, $4,230 of Medicare tax, and $26,085 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	$77,000
Officers	51,000
Office	13,000	$141,000
Deductions:
Social security tax	$8,460
Medicare tax	2,115
Federal income tax withheld	26,085
State income tax withheld	6,345
Retirement savings deductions	3,000
Medical insurance deductions	8,178	54,183
Net amount		$86,817

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, $8,460; Medicare tax, $2,115; state unemployment tax, $670; federal unemployment tax, $220.

16.

Issued Check No. 424 to Jay Bank for $47,235, in payment of $16,920 of social security tax, $4,230 of Medicare tax, and $26,085 of employees' federal income tax due.

19.

Issued Check No. 429 to Sims-Walker Insurance Company for $49,100, 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	$75,000
Officers	51,000
Office	12,000	$138,000
Deductions:
Social security tax	$8,280
Medicare tax	2,070
Federal income tax withheld	25,254
State income tax withheld	6,210
Retirement savings deductions	3,000	44,814
Net amount		$93,186

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, $8,280; Medicare tax, $2,070; state unemployment tax, $335; federal unemployment tax, $110.

27.

Issued Check No. 543 for $37,935 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 $6,000 invest in a retirement savings account for employees.

31.

Paid $74,000 to the employee pension plan. The annual pension cost is $96,000. (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.

2a. Journalize the following adjusting entry on December 31. Salaries accrued: operations salaries, $7,500; officers salaries, $5,100; office salaries, $1,200. 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
31	CashOffice Salaries PayableOperations Salaries ExpenseOperations Salaries PayableUnfunded Pension Liability	fill in the blank 158	fill in the blank 159
	Accounts PayableCashOffice Salaries PayableOfficers Salaries ExpenseOfficers Salaries Payable	fill in the blank 161	fill in the blank 162
	CashOffice Salaries PayableOffice Salaries ExpenseOfficers Salaries PayableUnfunded Pension Liability	fill in the blank 164	fill in the blank 165
	Accounts PayableCashSalaries PayableSales Salaries ExpenseVacation Pay Expense	fill in the blank 167	fill in the blank 168

2b. Journalize the following adjusting entry on December 31: Vacation pay, $25,900. If an amount box does not require an entry, leave it blank.

Date	Account	Debit	Credit
31	Accounts PayableCashUnfunded Pension LiabilityVacation Pay ExpenseVacation Pay Payable	fill in the blank 170	fill in the blank 171
	Accounts PayableCashUnfunded Pension LiabilityVacation Pay ExpenseVacation Pay Payable	fill in the blank 173	fill in the blank 174