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

$17,328

213

Medicare Tax Payable

4,560

214

Employees Federal Income Tax Payable

28,120

215

Employees State Income Tax Payable

27,360

216

State Unemployment Tax Payable

2,888

217

Federal Unemployment Tax Payable

912

218

Bond Deductions Payable

7,000

219

Medical Insurance Payable

52,900

411

Operations Salaries Expense

1,841,000

511

Officers Salaries Expense

1,201,000

512

Office Salaries Expense

306,000

519

Payroll Tax Expense

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 purchase U.S. savings bonds for employees.
Dec. 2	Issued Check No. 411 to Jay Bank for $ 50,008 in payment of $17,328 of social security tax, $4,560 of Medicare tax, and $28,120 of employees' federal income tax due.
Dec. 13	Journalized the entry to record the biweekly payroll. A summary of the payroll record follows:

Salary distribution:
Operations	$83,000
Officers	55,000
Office	14,000	152,000
Deductions:
Social security tax	9,120
Medicare tax	2,280
Federal income tax withheld	28,120
State income tax withheld	6,840
Savings bond deductions	3,500
Medical insurance deductions	8,816	58,676
Net amount		93,324

Dec. 13	Issued Check No. 420 in payment of the net amount of the biweekly payroll.
Dec. 13	Journalized the entry to record payroll taxes on employees' earnings of December 13: social security tax, $9,120; Medicare tax, $2,280; state unemployment tax, $720; federal unemployment tax, $240.
Dec. 16	Issued Check No. 424 to Jay Bank for $ 50,920, in payment of $18,240 of social security tax, $4,560 of Medicare tax, and $28,120 of employees' federal income tax due.
Dec. 19	Issued Check No. 429 to Sims-Walker Insurance Company for $ 52,900, in payment of the semiannual premium on the group medical insurance policy.
Dec. 27	Journalized the entry to record the biweekly payroll. A summary of the payroll record follows:

Salary distribution:
Operations	$81,000
Officers	55,000
Office	13,000	149,000
Deductions:
Social security tax	8,940
Medicare tax	2,235
Federal income tax withheld	27,267
State income tax withheld	6,705
Savings bond deductions	3,500	48,647
Net amount		100,353

Dec. 27	Issued Check No. 541 in payment of the net amount of the biweekly payroll.
Dec. 27.	Journalized the entry to record payroll taxes on employees' earnings of December 27: social security tax, $8,940; Medicare tax, $2,235; state unemployment tax, $360; federal unemployment tax, $120.
Dec. 27	Issued Check No. 543 for $ 40,905 to State Department of Revenue in payment of employees' state income tax due on December 31.
Dec. 31	Issued Check No. 545 to Jay Bank for $ 7,000 to purchase U.S. savings bonds for employees.
Dec. 31	Paid $80,000 to the employee pension plan. The annual pension cost is $104,000. (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 13th transactions, (a.) record the payroll and (b.) payment of salaries. For December 27th transactions, (a.) record the payroll, (b.) payment of salaries, (c.) record the taxes, and (d.) payment of taxes.

Date	Account	Debit	Credit
Dec. 2
Dec. 2
Dec. 13 (a.)
Dec. 13 (b.)
Dec. 13-Taxes
Dec. 16-Taxes
Dec. 19-Ins.
Dec. 27 (a.)
Dec. 27 (b.)
Dec. 27 (c.)
Dec. 27 (d.)
Dec. 31-Bonds
Dec. 31

2a. Journalize the following adjusting entry on December 31. Salaries accrued: operations salaries, $8,100; officers salaries, $5,500; office salaries, $1,300 . 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
Dec. 31

2b. Journalize the following adjusting entry on December 31: Vacation pay, $28,000.

Date	Account	Debit	Credit
Dec. 31

261,440