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:
|
101 Salaries Payable
|
-
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108 Bond Deductions Payable
|
$ 2,300
|
|
102 Social Security Tax Payable
|
$2,913
|
109 Medical Insurance Payable
|
2,520
|
|
103 Medicare Tax Payable
|
728
|
201 Sales Salaries Expense
|
700,000
|
|
104 Employees Federal Income Tax Payable
|
4,490
|
301 Officers Salaries Expense
|
340,000
|
|
105 Employees State Income Tax Payable
|
4,078
|
401 Office Salaries Expense
|
125,000
|
|
106 State Unemployment Tax Payable
|
1,260
|
408 Payroll Tax Expense
|
59,491
|
|
107 Federal Unemployment Tax Payable
|
360
|
|
|
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:
|
|
|
|
Sales
|
$14,500
|
|
|
Officers
|
7,100
|
|
|
Office
|
2,600
|
$24,200
|
|
Deductions:
|
|
|
|
Social security tax
|
$ 1,452
|
|
|
Medicare tax
|
363
|
|
|
Federal income tax withheld
|
4,308
|
|
|
State income tax withheld
|
1,089
|
|
|
Savings bond deductions
|
1,150
|
|
|
Medical insurance deductions
|
420
|
8,782
|
|
Net amount
|
|
$15,418
|
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:
|
Salary distribution:
|
|
|
|
Sales
|
$14,250
|
|
|
Officers
|
7,250
|
|
|
Office
|
2,750
|
$24,250
|
|
Deductions:
|
|
|
|
Social security tax
|
$ 1,455
|
|
|
Medicare tax
|
364
|
|
|
Federal income tax withheld
|
4,317
|
|
|
State income tax withheld
|
1,091
|
|
|
Savings bond deductions
|
1,150
|
8,377
|
|
Net amount
|
|
$15,873
|
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.