Reference no: EM13555783
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:
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101 Salaries Payable
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-
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108 Bond Deductions Payable
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$ 2,300
|
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102 Social Security Tax Payable
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$2,913
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109 Medical Insurance Payable
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2,520
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|
103 Medicare Tax Payable
|
728
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201 Sales Salaries Expense
|
700,000
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|
104 Employees Federal Income Tax Payable
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4,490
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301 Officers Salaries Expense
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340,000
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|
105 Employees State Income Tax Payable
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4,078
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401 Office Salaries Expense
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125,000
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106 State Unemployment Tax Payable
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1,260
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408 Payroll Tax Expense
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59,491
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107 Federal Unemployment Tax Payable
|
360
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|
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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:
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Salary distribution:
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Sales
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$14,500
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|
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Officers
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7,100
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|
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Office
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2,600
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$24,200
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Deductions:
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|
|
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Social security tax
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$ 1,452
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|
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Medicare tax
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363
|
|
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Federal income tax withheld
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4,308
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|
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State income tax withheld
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1,089
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|
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Savings bond deductions
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1,150
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|
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Medical insurance deductions
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420
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8,782
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Net amount
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$15,418
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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:
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Salary distribution:
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|
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Sales
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$14,250
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|
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Officers
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7,250
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|
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Office
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2,750
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$24,250
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Deductions:
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|
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Social security tax
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$ 1,455
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|
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Medicare tax
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364
|
|
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Federal income tax withheld
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4,317
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|
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State income tax withheld
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1,091
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|
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Savings bond deductions
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1,150
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8,377
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Net amount
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$15,873
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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.