PR 11-5A Payroll accounts and year-end entries OBJ. 2, 3,4 The following account

Question

PR 11-5A Payroll accounts and year-end entries OBJ. 2, 3,4 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 213 Medicare Tax Payable 218 Retirement Savings $ 3,400 27,000 9,273 2,318 15,455 13,909 1,400 500 Deductions Payable 219 Medical Insurance Payable 411 Operations Salaries Expense 511 Officers Salaries Expense 512 Office Salaries Expense 519 Payroll Tax Expense 214 Employees Federal Income Tax Payable 215 Employees State Income Tax Payable 216 State Unemployment Tax Payable 950,000 600,000 150,000 137,951 217 Federal Unemployment Tax Payable 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 invest in a retirement savings account for employees. rity tax, $2,318 of Medicare tax, and $15,455 of employees' federal income tax due. record follows: 2. Issued Check No. 411 to Jay Bank for $27,046, in payment of $9,273 of social secu 13. Journalized the entry to record the biweekly payroll. A summary of the payroll Salary distribution: Operations $43,200 27,200 6,800 Officers Office $77.200 Deductions: Social security tax Medicare tax Federal income tax withheld State income tax withheld Retirement savings deductions Medical insurance deductions $ 4,632 1,158 15,440 3,474 1,700 4,500 30,904 $46,296 Net amount

Explanation / Answer

1 Journal in the books of Garcon Co. Date Particulars Debit amount Credit amount 2-Dec Issued Check No. 410 for $3,400 to Jay Bank to purchase U.S. savings bonds for employees. Bond Deduction payable Account $3,400 To Bank Account $3,400 (Being U.S. Savings bonds purchased for employees) 2-Dec 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. Social Security Tax Payable $9,273 Medicare Tax Payable Account $2,318 Employees Federal Income Tax Payable Account $15,455       To Bank Account $27,046 (Being check issued for above payments) 13-Dec Record the biweekly payroll Operations Salary Expense Account $43,200 Officers Salary Expense Account $27,200 Office Salary Expense Account $6,800 To Social security tax Payale Account $4,632 To Medicare tax Payable Account $1,158 To Federal income tax withheld Payable Account $15,440   To State income tax withheld Payable Account $3,474    To Bond deductions Payable Account $1,700     To Medical insurance deductions Payable Account $4,500      To Salaries Payable Account $46,296 (Being Payroll for the biwekly period recorded) Dec.13 Salaries payable Account $46,296    To Bank Account $46,296 (Ch#420 issued for payment of net salaries) 13-Dec 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. Social Security Tax Payable Account $4,632 Medicare Tax Payable Account $1,158 State unemployment Tax Payable Account $350 Federal unemployment Tax Payable Account $125 To Bank Account $6,265 (Being above payments made) 16-Dec 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. Social Security Tax Payable Account $9,264 Medicare Tax Payable Account $2,316 Employees Federal Income Tax Payable Account $15,440 To Bank Account $27,020 (Being above payments made) 19-Dec Issued Check No. 429 to Sims-Walker Insurance Company for $31,500 in payment of the semiannual premium on the group medical insurance policy. Medical Insurance Policy Premium Account $31,500 To Bank Account $31,500 (Being check issued for medical insurance premium payment) 27-Dec Record the biweekly payroll Operations Salary Expense Account $42,800 Officers Salary Expense Account $28,000 Office Salary Expense Account $7,000 To Social security tax Payale Account $4,668 To Medicare tax Payable Account $1,167 To Federal income tax withheld Payable Account $15,404   To State income tax withheld Payable Account $3,501    To Bond deductions Payable Account $1,700        To Salaries Payable Account $51,360 (Being above payments made in regard to salary) 27-Dec Salaries payable Account $51,360    To Bank Account $51,360 (Ch#541 issued for payment of net salaries) 27-Dec 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. Social Security Tax Payable Account $4,668 Medicare Tax Payable Account $1,167 State unemployment Tax Payable Account $225 Federal unemployment Tax Payable Account $75    To Bank Account $6,135 (Being check issued for above payments) 27-Dec Issued Check No. 543 for $20,884 to State Department of Revenue in payment of employees’ state income tax due on December 31. Employees State Income Tax Payable Account $20,884    To Bank Account $20,884 (Being check issued for payment of employees' state income tax due) 31-Dec Issued Check No. 545 to Jay Bank for $3,400 to purchase U.S. savings bonds for employees. Bond Deduction payable Account $3,400    To Bank Account $3,400 (Being U.S. Savings bonds purchased for employees) 31-Dec Paid $45,000 to the employee pension plan. The annual pension cost is $60,000. (Record both the payment and unfunded pension liability.) Pension Expenses Acount $60,000 To Pension Expense Payable Account $60,000 ( (To record the annual pension expense liability) Pension Expenses Payable Acount $45,000    To Bank Account $45,000 (Being unfunded pension liability recorded) 2 31-Dec Salaries accrued: operations salaries, $8,560; officers salaries, $5,600; office salaries, $1,400. The payroll taxes are immaterial and are not accrued. Operations Salary Expense Account $8,560 Officers Salary Expense Account $5,600 Office Salary Expense Account $1,400        To Salaries Payable Account $15,560 (Being above payments made in regard to salary) 31-Dec Vacation pay, $15,000. Vacation pay Account $15,000       To Vacation Pay Payable Account $15,000 (Being payment of Vacation Pay made)

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