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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 | $17,100 |
213 | Medicare Tax Payable | 4,500 |
214 | Employees Federal Income Tax Payable | 27,750 |
215 | Employees State Income Tax Payable | 27,000 |
216 | State Unemployment Tax Payable | 2,850 |
217 | Federal Unemployment Tax Payable | 900 |
218 | Retirement Savings Deductions Payable | 7,000 |
219 | Medical Insurance Payable | 52,200 |
411 | Operations Salaries Expense | 1,817,000 |
511 | Officers Salaries Expense | 1,185,000 |
512 | Office Salaries Expense | 301,000 |
519 | Payroll Tax Expense | 258,000 |
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 invest in a retirement savings account for employees. |
2 | Issued Check No. 411 to Jay Bank for $49,350 in payment of $17,100 of social security tax, $4,500 of Medicare tax, and $27,750 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$82,000 Officers54,000 Office14,000$150,000Deductions: Social security tax$9,000 Medicare tax2,250 Federal income tax withheld27,750 State income tax withheld6,750 Retirement savings deductions3,500 Medical insurance deductions8,70057,950Net amount $92,050 | |
13 | Issued Check No. 420 in payment of the net amount of the biweekly payroll to fund the payroll bank account. |
13 | Journalized the entry to record payroll taxes on employees’ earnings of December 13: social security tax, $9,000; Medicare tax, $2,250; state unemployment tax, $710; federal unemployment tax, $230. |
16 | Issued Check No. 424 to Jay Bank for $50,250, in payment of $18,000 of social security tax, $4,500 of Medicare tax, and $27,750 of employees’ federal income tax due. |
19 | Issued Check No. 429 to Sims-Walker Insurance Company for $52,200, 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$80,000 Officers54,000 Office13,000$147,000Deductions: Social security tax$8,820 Medicare tax2,205 Federal income tax withheld26,901 State income tax withheld6,615 Retirement savings deductions3,50048,041Net amount $98,959 | |
27 | Issued Check No. 541 in payment of the net amount of the biweekly payroll to fund the payroll bank account. |
27 | Journalized the entry to record payroll taxes on employees’ earnings of December 27: social security tax, $8,820; Medicare tax, $2,205; state unemployment tax, $355; federal unemployment tax, $115. |
27 | Issued Check No. 543 for $40,365 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 $7,000 invest in a retirement savings account for employees. |
31 | Paid $79,000 to the employee pension plan. The annual pension cost is $103,000. (Record both the payment and unfunded pension liability.) |
Required:
1. Journalize the transactions. For a compound transaction, if an amount box does not require an entry, leave it blank. For December 16th transactions, (a.) record the payroll and (b.) payment of salaries. For December 30th transactions, (a.) record the payroll, (b.) payment of salaries, (c.) record the taxes, and (d.) payment of taxes.
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