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	$18,126
213	Medicare Tax Payable	4,770
214	Employees Federal Income Tax Payable	29,415
215	Employees State Income Tax Payable	28,620
216	State Unemployment Tax Payable	3,021
217	Federal Unemployment Tax Payable	954
218	Retirement Savings Deductions Payable	7,000
219	Medical Insurance Payable	55,300
411	Operations Salaries Expense	1,925,000
511	Officers Salaries Expense	1,256,000
512	Office Salaries Expense	320,000
519	Payroll Tax Expense	273,480

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 invest in a retirement savings account for employees.

2

Issued Check No. 411 to Jay Bank for $52,311 in payment of $18,126 of social security tax, $4,770 of Medicare tax, and $29,415 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	$89,000
Officers	56,000
Office	14,000	$159,000
Deductions:
Social security tax	$9,540
Medicare tax	2,385
Federal income tax withheld	29,415
State income tax withheld	7,155
Retirement savings deductions	3,500
Medical insurance deductions	9,222	61,217
Net amount		$97,783

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, $9,540; Medicare tax, $2,385; state unemployment tax, $750; federal unemployment tax, $250.

16

Issued Check No. 424 to Jay Bank for $53,265, in payment of $19,080 of social security tax, $4,770 of Medicare tax, and $29,415 of employees' federal income tax due.

19

Issued Check No. 429 to Sims-Walker Insurance Company for $55,300, 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	$86,000
Officers	56,000
Office	14,000	$156,000
Deductions:
Social security tax	$9,360
Medicare tax	2,340
Federal income tax withheld	28,548
State income tax withheld	7,020
Retirement savings deductions	3,500	50,768
Net amount		$105,232

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, $9,360; Medicare tax, $2,340; state unemployment tax, $375; federal unemployment tax, $125.

27

Issued Check No. 543 for $42,795 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 $7,000 invest in a retirement savings account for employees.

31

Paid $84,000 to the employee pension plan. The annual pension cost is $109,000. (Record both the payment and unfunded pension liability.)

Required:

1. Journalize the transactions. For a compound transaction, 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
2
2
13 (a.)
13 (b.)
13-Taxes
16-Taxes
19-Ins.
27 (a.)
27 (b.)
27 (c.)
27 (d.)
31-Bonds
31

2a. Journalize the following adjusting entry on December 31. Salaries accrued: operations salaries, $8,600; officers salaries, $5,600; office salaries, $1,400. The payroll taxes are immaterial and are not accrued. For a compound transaction, if an amount box does not require an entry, leave it blank.

Date	Account	Debit	Credit
31

2b. Journalize the following adjusting entry on December 31: Vacation pay, $29,400.

Date	Account	Debit	Credit
31