Question

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


The following transactions relating to payroll, payroll deductions, and payroll taxes occurred during December:
Dec. 2. Issued Check No. 728 for $3,000 to First National Bank to purchase U.S. savings bonds for employees.
3. Issued Check No. 729 to First National Bank for $23,181, in payment of $8,032 of social security tax, $2,114 of Medicare tax, and $13,035 of employees' federal income tax due.
14. Journalized the entry to record the biweekly payroll. A summary of the payroll record follows:


14. Issued Check No. 738 in payment of the net amount of the biweekly payroll.
14. Journalized the entry to record payroll taxes on employees' earnings of December 14: social security tax, $3,931; Medicare tax, $1,053; state unemployment tax, $290; federal unemployment tax, $84.
17. Issued Check No. 744 to First National Bank for $22,464, in payment of $7,862 of social security tax, $2,106 of Medicare tax, and $12,496 of employees' federal income tax due.
18. Issued Check No. 750 to Pico Insurance Company for $24,000, in payment of the semiannual premium on the group medical insurance policy.
28. Journalized the entry to record the biweekly payroll. A summary of the payroll record follows:


28. Issued Check No. 782 in payment of the net amount of the biweekly payroll.
Dec. 28. Journalized the entry to record payroll taxes on employees' earnings of December 28: social security tax, $3,856; Medicare tax, $1,071; state unemployment tax, $155; federal unemployment tax, $38.
30. Issued Check No. 791 to First National Bank for $3,000 to purchase U.S. savings bonds for employees.
30. Issued Check No. 792 for $19,054 to First National Bank in payment of employees' state income tax due on December 31.
31. Paid $43,000 to the employee pension plan. The annual pension cost is $45,000.
(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, $3,900; officers salaries, $2,600; office salaries, $640. The payroll taxes are immaterial and are not accrued.
b. Vacation pay,$12,650.


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  • CreatedJuly 17, 2012
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