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	$15,048
213	Medicare Tax Payable	3,960
214	Employees Federal Income Tax Payable	24,420
215	Employees State Income Tax Payable	23,760
216	State Unemployment Tax Payable	2,508
217	Federal Unemployment Tax Payable	792
218	Retirement Savings Deductions Payable	6,000
219	Medical Insurance Payable	45,900
411	Operations Salaries Expense	1,599,000
511	Officers Salaries Expense	1,043,000
512	Office Salaries Expense	265,000
519	Payroll Tax Expense	227,040

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 $43,428 in payment of $15,048 of social security tax, $3,960 of Medicare tax, and $24,420 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	$72,000
Officers	48,000
Office	12,000	$132,000
Deductions:
Social security tax	$7,920
Medicare tax	1,980
Federal income tax withheld	24,420
State income tax withheld	5,940
Retirement savings deductions	3,000
Medical insurance deductions	7,656	50,916
Net amount		$81,084

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, $7,920; Medicare tax, $1,980; state unemployment tax, $630; federal unemployment tax, $210.

16.

Issued Check No. 424 to Jay Bank for $44,220, in payment of $15,840 of social security tax, $3,960 of Medicare tax, and $24,420 of employees' federal income tax due.

19.

Issued Check No. 429 to Sims-Walker Insurance Company for $45,900, 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	$70,000
Officers	48,000
Office	11,000	$129,000
Deductions:
Social security tax	$7,740
Medicare tax	1,935
Federal income tax withheld	23,607
State income tax withheld	5,805
Retirement savings deductions	3,000	42,087
Net amount		$86,913

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, $7,740; Medicare tax, $1,935; state unemployment tax, $315; federal unemployment tax, $105.

27.

Issued Check No. 543 for $35,505 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 $69,000 to the employee pension plan. The annual pension cost is $90,000. (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, $7,000; officers salaries, $4,800; office salaries, $1,100. The payroll taxes are immaterial and are not accrued. If an amount box does not require an entry, leave it blank.

2b. Journalize the following adjusting entry on December 31: Vacation pay, $24,200. If an amount box does not require an entry, leave it blank.