211 Salaries Payable — 218 Bond Deductions Payable $ 3,400
212 Social Security Tax Payable $ 9,273 219 Medical Insurance Payable 27,000
213 Medicare Tax Payable 2,318 411 Operations Salaries Expense 950,000
214 Employees Federal Income Tax Payable 15,455 511 Officers Salaries Expense 600,000
215 Employees State Income Tax Payable 13,909 512 Office Salaries Expense 150,000
216 State Unemployment Tax Payable 1,400 519 Payroll Tax Expense 137,951
217 Federal Unemployment Tax Payable 500
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 purchase U.S. savings bonds for employees.
2. 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.
13. Journalized the entry to record the biweekly payroll. A summary of the payroll record follows:
Salary distribution:
Operations $43,200
Officers 27,200
Office 6,800 $77,200
Deductions:
Social security tax $ 4,632
Medicare tax 1,158
Federal income tax withheld 15,440
State income tax withheld 3,474
Savings bond deductions 1,700
Medical insurance deductions 4,500 30,904
Net amount $46,296
Dec. 13. Issued Check No. 420 in payment of the net amount of the biweekly payroll.
13. 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.
16. 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.
19. Issued Check No. 429 to Sims-Walker Insurance Company for $31,500 in payment of the semiannual premium on the group medical insurance policy.
27. Journalized the entry to record the biweekly payroll. A summary of the payroll record follows:
Salary distribution:
Operations $42,800
Officers 28,000
Office 7,000 $77,800
Deductions:
Social security tax $ 4,668
Medicare tax 1,167
Federal income tax withheld 15,404
State income tax withheld 3,501
Savings bond deductions 1,700 26,440
Net amount $51,360
27. Issued Check No. 541 in payment of the net amount of the biweekly payroll.
27. 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.
27. Issued Check No. 543 for $20,884 to State Department of Revenue in payment of employees’ state income tax due on December 31.
31. Issued Check No. 545 to Jay Bank for $3,400 to purchase U.S. savings bonds for employees.
31. Paid $45,000 to the employee pension plan. The annual pension cost is $60,000. (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, $8,560; officers salaries, $5,600; office salaries, $1,400. The payroll taxes are immaterial and are not accrued.
b. Vacation pay, $15,000.
Answer:
1. Dec. 2 Bond Deductions Payable 3,400
Cash 3,400
2 Social Security Tax Payable 9,273
Medicare Tax Payable 2,318
Employees Federal Income Tax Payable 15,455
Cash 27,046
13 Operations Salaries Expense 43,200
Officers Salaries Expense 27,200
Office Salaries Expense 6,800
Social Security Tax Payable 4,632
Medicare Tax Payable 1,158
Employees Federal Income Tax Payable 15,440
Employees State Income Tax Payable 3,474
Bond Deductions Payable 1,700
Medical Insurance Payable 4,500
Salaries Payable 46,296
13 Salaries Payable 46,296
Cash 46,296
13 Payroll Tax Expense 6,265
Social Security Tax Payable 4,632
Medicare Tax Payable 1,158
State Unemployment Tax Payable 350
Federal Unemployment Tax Payable 125
16 Social Security Tax Payable 9,264
Medicare Tax Payable 2,316
Employees Federal Income Tax Payable 15,440
Cash 27,020
19 Medical Insurance Payable 31,500
Cash 31,500
Dec. 27 Operations Salaries Expense 42,800
Officers Salaries Expense 28,000
Office Salaries Expense 7,000
Social Security Tax Payable 4,668
Medicare Tax Payable 1,167
Employees Federal Income Tax Payable 15,404
Employees State Income Tax Payable 3,501
Bond Deductions Payable 1,700
Salaries Payable 51,360
27 Salaries Payable 51,360
Cash 51,360
27 Payroll Tax Expense 6,135
Social Security Tax Payable 4,668
Medicare Tax Payable 1,167
State Unemployment Tax Payable 225
Federal Unemployment Tax Payable 75
27 Employees State Income Tax Payable 20,884
Cash 20,884
31 Bond Deductions Payable 3,400
Cash 3,400
31 Pension Expense 60,000
Cash 45,000
Unfunded Pension Liability 15,000
To record pension cost and unfunded
liability.
2. a. Dec. 31 Operations Salaries Expense 8,560
Officers Salaries Expense 5,600
Office Salaries Expense 1,400
Salaries Payable 15,560
Accrued wages for the period.
b. 31 Vacation Pay Expense 15,000
Vacation Pay Payable 15,000
Vacation pay accrued for the period.
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