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
|
-
|
218
|
Bond Deductions Payable
|
$ 3,400
|
|
212
|
Social Security Tax Payable
|
$ 9,273
|
219
|
Medical Insurance Payable
|
27,000
|
|
213
|
Medicare Tax Payable
|
2,318
|
411
|
Operations Salaries Expense
|
950,000
|
|
214
|
Employees Federal Income Tax Payable
|
15,455
|
511
|
Officers Salaries Expense
|
600,000
|
|
215
|
Employees State Income Tax Payable
|
13,909
|
512
|
Office Salaries Expense
|
150,000
|
|
216
|
State Unemployment Tax Payable
|
1,400
|
519
|
Payroll Tax Expense
|
137,951
|
|
217
|
Federal Unemployment Tax Payable
|
500
|
|
|
|
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:
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Salary distribution:
|
|
|
|
Operations
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$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
|
30,904
|
|
Medical insurance deductions
|
4,500
|
$46,296
|
|
Net amount
|
|
|
27. Issued Check No. 541 in payment of the net amount of the biweekly payroll.
27. Journalized 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.)
Instructions
1. Journalize the transactions.
2. Journalize the following adjusting entries on December 31:
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.