Payroll Accounts and Year-End Entries The following accounts, with the balances
ID: 2535566 • Letter: P
Question
Payroll Accounts and Year-End Entries
The following accounts, with the balances indicated, appear in the ledger of Codigo Co. on December 1 of the current year:
The following transactions relating to payroll, payroll deductions, and payroll taxes occurred during December:
Required:
1. Journalize the transactions. For a compound transaction, if an amount box does not require an entry, leave it blank. For December 12th and 26th transactions, (a.) record the payroll and (b.) payment of salaries.
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. For a compound transaction, if an amount box does not require an entry, leave it blank.
b. Vacation pay, $13,350.
101 Salaries Payable — 102 Social Security Tax Payable $2,913 103 Medicare Tax Payable 728 104 Employees Federal Income Tax Payable 4,490 105 Employees State Income Tax Payable 4,078 106 State Unemployment Tax Payable 1,260 107 Federal Unemployment Tax Payable 360 108 Retirement Savings Deductions Payable 2,300 109 Medical Insurance Payable 2,520 201 Sales Salaries Expense 700,000 301 Officers Salaries Expense 340,000 401 Office Salaries Expense 125,000 408 Payroll Tax Expense 59,491Explanation / Answer
Date Account Description Debit Credit 1-Dec Medical Insurance Payable 2,520.00 Cash 2,520.00 (Issued Check No. 815 to Aberderas Insurance Company) 1-Dec Employees Federal Income Tax Payable 4,490.00 Social Security Tax Payable 2,913.00 Medicare Tax Payable 728.00 Cash 8,131.00 (Issued Check No. 816 to Alvarez Bank for $8,131) 2-Dec Retirement Savings Deductions Payable 2,300.00 Cash 2,300.00 (Issued Check No. 817 for $2,300 to Alvarez Bank) 12-Dec Sales Salaries Expense 14,500.00 Officers Salaries Expense 7,100.00 Office Salaries Expense 2,600.00 Medical Insurance Payable 420.00 Social Security Tax Payable 1,452.00 Medicare Tax Payable 363.00 Retirement Savings Deductions Payable 1,150.00 Employees Federal Income Tax Payable 4,308.00 State Income Tax Payable 1,089.00 Salary Payable 15,418.00 (Being Payroll expenses Recorded) 12-Dec Salary Payable 15,418.00 Cash 15,418.00 (Being salary Paid) 12-Dec Payroll taxes 2,220.00 Social Security Tax Payable 1,452.00 Medicare Tax Payable 363.00 State Unemployment Tax Payable 315.00 Federal Unemployment Tax Payable 90.00 (Being Payroll Expenses Recorded) 15-Dec Social Security Tax Payable 2,904.00 Medicare Tax Payable 726.00 Federal Unemployment Tax Payable 4,308.00 To Cash 7,938.00 (Issued Check No. 830 to Alvarez Bank for $7,938) 26-Dec Sales Salaries Expense 14,250.00 Officers Salaries Expense 7,250.00 Office Salaries Expense 2,750.00 Medical Insurance Payable Social Security Tax Payable 1,455.00 Medicare Tax Payable 364.00 Retirement Savings Deductions Payable 1,150.00 Employees Federal Income Tax Payable 4,317.00 State Income Tax Payable 1,091.00 Salary Payable 15,873.00 (Being Payroll expenses Recorded) 26-Dec Salary Payable 15,873.00 Cash 15,873.00 (Being salary Paid) 26-Dec Payroll taxes 2,009.00 Social Security Tax Payable 1,455.00 Medicare Tax Payable 364.00 State Unemployment Tax Payable 150.00 Federal Unemployment Tax Payable 40.00 (Being Payroll Expenses Recorded) 30-Dec State Income Tax Payable 6,528.00 Cash 6,528.00 (Issued Check No. 851 for $6,258 to State Department of Revenue,) 30-Dec Retirement Savings Deductions Payable 2,300.00 Cash 2,300.00 (Issued Check No. 852 to Alvarez Bank for $2,300 ) 31-Dec Pension Expenses 65,500.00 Cash 55,400.00 Pension liability 10,100.00 2 a Sales Salaries Expense 4,275.00 Officers Salaries Expense 2,175.00 Office Salaries Expense 825.00 To Accrued Salaries 7,275.00 b Vacation Expenses 13,350.00 To Vacation Payable 13,350.00
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