The following accounts, with the balances indicated, appear in the ledger of Wadsley Gifts Co. on December
Question:
The following accounts, with the balances indicated, appear in the ledger of Wadsley 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. 321 for $2,800 to Johnson Bank to purchase U.S. savings bonds for employees
3. Issued Check No. 322 to Johnson Bank for $20,877, in payment of $7,234 of social security tax, $1,904 of Medicare tax, and $11,739 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. 331 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, $3,550; Medicare tax, $951; state unemployment tax, $300; federal unemployment tax, $100.
17. Issued Check No. 335 to Johnson Bank for $20,287, in payment of $7,100 of social security tax, $1,902 of Medicare tax, and $11,285 of employees’ federal income tax due.
18. Issued Check No. 340 to Tidy Insurance Company for $22,000, 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. 352 in payment of the net amount of the biweekly payroll.
28. Journalized the entry to record payroll taxes on employees’ earnings of December 28: social security tax, $3,348; Medicare tax, $930; state unemployment tax, $150; federal unemployment tax, $50.
30. Issued Check No. 354 to Johnson Bank for $2,800 to purchase U.S. savings bonds for employees.
30. Issued Check No. 356 for $17,065 to Johnson Bank in payment of employees’ state income tax due on December 31.
Dec. 31. Paid $34,000 to the employee pension plan. The annual pension cost is $40,000. (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, $3,420; officers' salaries, $2,240; office salaries, $540. The payroll taxes are immaterial and are not accrued.
b. Vacation pay,$11,500.
Step by Step Answer:
Accounting
ISBN: 978-0324662962
23rd Edition
Authors: Jonathan E. Duchac, James M. Reeve, Carl S. Warren