Question

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


The following transactions relating to payroll, payroll deductions, and payroll taxes occurred during December:
Dec. 1. Issued Check No. 815 to Aberderas Insurance Company for $2,520, in payment of the semiannual premium on the group medical insurance policy.
1. Issued Check No. 816 to Alvarez Bank for $8,131, in payment for $2,913 of social security tax, $728 of Medicare tax, and $4,490 of employees' federal income tax due.
2. Issued Check No. 817 for $2,300 to Alvarez Bank to purchase U.S. savings bonds for employees.
12. Journalized the entry to record the biweekly payroll. A summary of the payroll record follows:


12. Issued Check No. 822 in payment of the net amount of the biweekly payroll.
12. Journalized the entry to record payroll taxes on employees' earnings of December 12: social security tax, $1,452; Medicare tax, $363; state unemployment tax, $315; federal unemployment tax, $90.
15. Issued Check No. 830 to Alvarez Bank for $7,938, in payment of $2,904 of social security tax, $726 of Medicare tax, and $4,308 of employees' federal income tax due.
26. Journalized the entry to record the biweekly payroll. A summary of the payroll record follows:


26. Issued Check No. 840 for the net amount of the biweekly payroll.
Dec. 26. Journalized the entry to record payroll taxes on employees' earnings of December 26: social security tax, $1,455; Medicare tax, $364; state unemployment tax, $150; federal unemployment tax, $40.
30. Issued Check No. 851 for $6,258 to State Department of Revenue, in payment of employees' state income tax due on December 31.
30. Issued Check No. 852 to Alvarez Bank for $2,300 to purchase U.S. savings bonds for employees.
31. Paid $55,400 to the employee pension plan. The annual pension cost is $65,500.
(Record both the payment and the unfunded pension liability.)

Instructions
1. Journalize the transactions.
2. Journalize the following adjusting entries on December 31:
a. Salaries accrued: sales salaries, $4,275; officers’ salaries, $2,175; office salaries, $825.
The payroll taxes are immaterial and are not accrued.
b. Vacation pay,$13,350.


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  • CreatedFebruary 28, 2014
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