Chapter 10, Problem 10.5APR

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:
	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.
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	26,000
	Net amount		$46,296
Dec. 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.