The following accounts, with the balances indicated, appear in the ledger of Garcon Co. on December 1 of the current year:

Account No . Account Name Balance

211 Salaries Payable

212 Social Security Tax Payable $9,273

213 Medicare Tax Payable $2,318

214 Employees Federal Income Tax Payable $15,455

215 Employees State Income Tax Payable $13,909

216 State Unemployment Tax Payable $1,400

217 Federal Unemployment Tax Payable $500

218 Bond Deductions Payable $3,400

219 Medical Insurance Payable $27,000

411 Operations Salaries Expense $950,000

511 Officers Salaries Expense $600,000

512 Office Salaries Expense $150,000

519 Payroll Tax Expense $137,951

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

Dec. 2 Issued Check No. 410 for $3,400 to Jay Bank to purchase U.S. savings bonds for employees.

2 Issued Check No. 411 to Jay Bank for $27,046 in payment of $9,273 of social security tax, $2,318 of Medicare tax, and $15,455 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 $43,200

Officers $27,200

Office $6,800 $77,200

Deductions:

Social security tax $ 4,632

Medicare tax $1,158

Federal income tax withheld $15,440

State income tax withheld $3,474

Savings bond deductions $1,700

Medical insurance deductions $4,500 $30,904

Net amount $46,296

13 Issued Check No. 420 in payment of the net amount of the biweekly payroll.

13 Journalized the entry to record payroll taxes on employees earnings of December 13: social security tax, $4,632; Medicare tax, $1,158; state unemployment tax, $350; federal unemployment tax, $125.

16 Issued Check No. 424 to Jay Bank for $27,020, in payment of $9,264 of social security tax, $2,316 of Medicare tax, and $15,440 of employees federal income tax due.

19 Issued Check No. 429 to Sims-Walker Insurance Company for $31,500 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 $42,800

Officers $28,000

Office $7,000 $77,800

Deductions:

Social security tax $4,668

Medicare tax $1,167

Federal income tax withheld $15,404

State income tax withheld $3,501

Savings bond deductions $1,700 $26,440

Net amount $51,360

27 Issued Check No. 541 in payment of the net amount of the biweekly payroll.

27Journalized the entry to record payroll taxes on employees earnings of December 27: social security tax, $4,668; Medicare tax, $1,167; state unemployment tax, $225; federal unemployment tax, $75.

27 Issued Check No. 543 for $20,884 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 $3,400 to purchase U.S. savings bonds for employees.

31 Paid $45,000 to the employee pension plan. The annual pension cost is $60,000. (Record both the payment and unfunded pension liability.)

Required:

1. Journalize the transactions of the journal. Refer to the Chart of Accounts for exact wording of account titles.

2.journalize the following adjusting entries on December 31 (refer to the Chart of Accounts for exact wording of account titles):

A. Salaries accrued: operations salaries, $8,560; officers salaries, $5,600; office salaries, $1,400. The payroll taxes are immaterial and are not accrued.

B. Vacation pay, $15,000.

CHART OF ACCOUNTS

Garcon Co.

General Ledger

ASSETS

110Cash

111Accounts Receivable

112Interest Receivable

113Notes Receivable

115Merchandise Inventory

116Supplies

118Prepaid Insurance

120Land

123Building

124Accumulated Depreciation-Building

125Office Equipment

126Accumulated Depreciation-Office Equipment

LIABILITIES

210Accounts Payable

211Salaries Payable

212Social Security Tax Payable

213Medicare Tax Payable

214Employees Federal Income Tax Payable

215Employees State Income Tax Payable

216State Unemployment Tax Payable

217Federal Unemployment Tax Payable

218Bond Deductions Payable

219Medical Insurance Payable

220Interest Payable

221Notes Payable

226Vacation Pay Payable

227Unfunded Pension Liability

228Product Warranty Payable

EQUITY

310Owner, Capital

311Owner, Drawing

312Income Summary

REVENUE

410Sales

610Interest Revenue

EXPENSES

411Operations Salaries Expense

412Cost of Merchandise Sold

511Officers Salaries Expense

512Office Salaries Expense

519Payroll Tax Expense

524Depreciation Expense-Building

525Delivery Expense

526Repairs Expense

529Selling Expenses

531Rent Expense

532Depreciation Expense-Office Equipment

533Insurance Expense

534Supplies Expense

536Vacation Pay Expense

537Pension Expense

538Cash Short and Over

539Product Warranty Expense

540Miscellaneous Expense

710Interest Expense