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: On page 10 of the journal: 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. On page 11 of the journal: 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. 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.)

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: On page 10 of the journal: 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. On page 11 of the journal: 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. 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.)

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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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:

On page 10 of the journal:

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.

On page 11 of the journal:

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.
	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.)

Required:

Journalize the transactions on pages 10 and 11 of the journal. Refer to the Chart of Accounts for exact wording of account titles.

On page 12 of the journal, 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.

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