PR 11-6A Payroll accounts and year-end entries
The following accounts, with the balances indicated, appear in the ledger of Quinn Co. on December 1 of the current year:
311 Salaries Payable — 318 Bond Deductions Payable $ 4,200
312 Social Security Tax Payable $10,830 319 Medical Insurance Payable 33,000
313 Medicare Tax Payable 2,850 511 Operations Salaries Expense 1,150,000
314 Employees Federal Income Tax Payable 17,575 611 Offi cers Salaries Expense 750,000
315 Employees State Income Tax Payable 17,100 612 Offi ce Salaries Expense 190,000
316 State Unemployment Tax Payable 1,800 619 Payroll Tax Expense 163,680
317 Federal Unemployment Tax Payable 600
The following transactions relating to payroll, payroll deductions, and payroll taxes occurred during December:
Dec. 2. Issued Check No. 210 for $4,200 to Ace Bank to purchase U.S. savings bonds for employees.
5. Issued Check No. 211 to Ace Bank for $31,255 in payment of $10,830 of social security tax, $2,850 of Medicare tax, and $17,575 of employees’ federal income tax due.
16. Journalized the entry to record the biweekly payroll. A summary of the payroll record follows:
Salary distribution:
Operations $52,200
Offi cers 34,100
Offi ce 8,650 $94,950
Deductions:
Social security tax $ 5,697
Medicare tax 1,424
Federal income tax withheld 17,566
State income tax withheld 4,273
Savings bond deductions 2,100
Medical insurance deductions 5,500 36,560
Net amount $58,390
Dec. 16. Issued Check No. 220 in payment of the net amount of the biweekly payroll.
16. Journalized the entry to record payroll taxes on employees’ earnings of December 16: social security tax, $5,697; Medicare tax, $1,424; state unemployment tax, $450; federal unemployment tax, $150.
19. Issued Check No. 224 to Ace Bank for $31,048, in payment of $11,394 of social security tax, $2,848 of Medicare tax, and $17,566 of employees’ federal income tax due.
19. Issued Check No. 229 to Blackwood Insurance Company for $33,000, in payment of the semiannual premium on the group medical insurance policy.
30. Journalized the entry to record the biweekly payroll. A summary of the payroll record follows:
Salary distribution:
Operations $51,400
Offi cers 34,100
Offi ce 8,400 $93,900
Deductions:
Social security tax $ 5,634
Medicare tax 1,409
Federal income tax withheld 17,184
State income tax withheld 4,226
Savings bond deductions 2,100 30,553
Net amount $63,347
30. Issued Check No. 341 in payment of the net amount of the biweekly payroll.
30. Journalized the entry to record payroll taxes on employees’ earnings of December
30: social security tax, $5,634; Medicare tax, $1,409; state unemployment tax, $225; federal unemployment tax, $75.
30. Issued Check No. 243 for $25,599 to State Department of Revenue in payment of employees’ state income tax due on December 31.
30. Issued Check No. 245 to Ace Bank for $4,200 to purchase U.S. savings bonds for employees.
31. Paid $50,000 to the employee pension plan. The annual pension cost is $65,000. (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, $5,140; officers salaries, $3,410; office salaries, $840. The payroll taxes are immaterial and are not accrued.
b. Vacation pay, $17,500.
Answer:
1.
Dec. 2 Bond Deductions Payable................................... 4,200
Cash................................................................. 4,200
5 Social Security Tax Payable................................ 10,830
Medicare Tax Payable.......................................... 2,850
Employees Federal Income Tax Payable ........... 17,575
Cash................................................................. 31,255
16 Operations Salaries Expense.............................. 52,200
Officers Salaries Expense ................................... 34,100
Office Salaries Expense ...................................... 8,650
Social Security Tax Payable .......................... 5,697
Medicare Tax Payable..................................... 1,424
Employees Federal Income Tax Payable...... 17,566
Employees State Income Tax Payable.......... 4,273
Bond Deductions Payable.............................. 2,100
Medical Insurance Payable ............................ 5,500
Salaries Payable ............................................. 58,390
16 Salaries Payable................................................... 58,390
Cash................................................................. 58,390
16 Payroll Tax Expense ............................................ 7,721
Social Security Tax Payable .......................... 5,697
Medicare Tax Payable..................................... 1,424
State Unemployment Tax Payable................. 450
Federal Unemployment Tax Payable............. 150
19 Social Security Tax Payable................................ 11,394
Medicare Tax Payable.......................................... 2,848
Employees Federal Income Tax Payable ........... 17,566
Cash................................................................. 31,808
19 Medical Insurance Payable.................................. 33,000
Cash................................................................. 33,000
Dec. 30 Operations Salaries Expense.............................. 51,400
Officers Salaries Expense ................................... 34,100
Office Salaries Expense ...................................... 8,400
Social Security Tax Payable .......................... 5,634
Medicare Tax Payable..................................... 1,409
Employees Federal Income Tax Payable...... 17,184
Employees State Income Tax Payable.......... 4,226
Bond Deductions Payable.............................. 2,100
Salaries Payable ............................................. 63,347
30 Salaries Payable................................................... 63,347
Cash................................................................. 63,347
30 Payroll Tax Expense ............................................ 7,343
Social Security Tax Payable .......................... 5,634
Medicare Tax Payable..................................... 1,409
State Unemployment Tax Payable................. 225
Federal Unemployment Tax Payable............. 75
30 Employees State Income Tax Payable ............... 25,599
Cash................................................................. 25,599
30 Bond Deductions Payable................................... 4,200
Cash................................................................. 4,200
31 Pension Expense ................................................. 65,000
Cash................................................................. 50,000
Unfunded Pension Liability............................ 15,000
To record pension cost and unfunded
liability.
2.
Dec. 31 Operations Salaries Expense.............................. 5,140
Officers Salaries Expense ................................... 3,410
Office Salaries Expense ...................................... 840
Salaries Payable ............................................. 9,390
Accrued wages for the period.
31 Vacation Pay Expense ......................................... 17,500
Vacation Pay Payable..................................... 17,500
Vacation pay accrued for the period.
311 Salaries Payable — 318 Bond Deductions Payable $ 4,200
312 Social Security Tax Payable $10,830 319 Medical Insurance Payable 33,000
313 Medicare Tax Payable 2,850 511 Operations Salaries Expense 1,150,000
314 Employees Federal Income Tax Payable 17,575 611 Offi cers Salaries Expense 750,000
315 Employees State Income Tax Payable 17,100 612 Offi ce Salaries Expense 190,000
316 State Unemployment Tax Payable 1,800 619 Payroll Tax Expense 163,680
317 Federal Unemployment Tax Payable 600
The following transactions relating to payroll, payroll deductions, and payroll taxes occurred during December:
Dec. 2. Issued Check No. 210 for $4,200 to Ace Bank to purchase U.S. savings bonds for employees.
5. Issued Check No. 211 to Ace Bank for $31,255 in payment of $10,830 of social security tax, $2,850 of Medicare tax, and $17,575 of employees’ federal income tax due.
16. Journalized the entry to record the biweekly payroll. A summary of the payroll record follows:
Salary distribution:
Operations $52,200
Offi cers 34,100
Offi ce 8,650 $94,950
Deductions:
Social security tax $ 5,697
Medicare tax 1,424
Federal income tax withheld 17,566
State income tax withheld 4,273
Savings bond deductions 2,100
Medical insurance deductions 5,500 36,560
Net amount $58,390
Dec. 16. Issued Check No. 220 in payment of the net amount of the biweekly payroll.
16. Journalized the entry to record payroll taxes on employees’ earnings of December 16: social security tax, $5,697; Medicare tax, $1,424; state unemployment tax, $450; federal unemployment tax, $150.
19. Issued Check No. 224 to Ace Bank for $31,048, in payment of $11,394 of social security tax, $2,848 of Medicare tax, and $17,566 of employees’ federal income tax due.
19. Issued Check No. 229 to Blackwood Insurance Company for $33,000, in payment of the semiannual premium on the group medical insurance policy.
30. Journalized the entry to record the biweekly payroll. A summary of the payroll record follows:
Salary distribution:
Operations $51,400
Offi cers 34,100
Offi ce 8,400 $93,900
Deductions:
Social security tax $ 5,634
Medicare tax 1,409
Federal income tax withheld 17,184
State income tax withheld 4,226
Savings bond deductions 2,100 30,553
Net amount $63,347
30. Issued Check No. 341 in payment of the net amount of the biweekly payroll.
30. Journalized the entry to record payroll taxes on employees’ earnings of December
30: social security tax, $5,634; Medicare tax, $1,409; state unemployment tax, $225; federal unemployment tax, $75.
30. Issued Check No. 243 for $25,599 to State Department of Revenue in payment of employees’ state income tax due on December 31.
30. Issued Check No. 245 to Ace Bank for $4,200 to purchase U.S. savings bonds for employees.
31. Paid $50,000 to the employee pension plan. The annual pension cost is $65,000. (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, $5,140; officers salaries, $3,410; office salaries, $840. The payroll taxes are immaterial and are not accrued.
b. Vacation pay, $17,500.
Answer:
1.
Dec. 2 Bond Deductions Payable................................... 4,200
Cash................................................................. 4,200
5 Social Security Tax Payable................................ 10,830
Medicare Tax Payable.......................................... 2,850
Employees Federal Income Tax Payable ........... 17,575
Cash................................................................. 31,255
16 Operations Salaries Expense.............................. 52,200
Officers Salaries Expense ................................... 34,100
Office Salaries Expense ...................................... 8,650
Social Security Tax Payable .......................... 5,697
Medicare Tax Payable..................................... 1,424
Employees Federal Income Tax Payable...... 17,566
Employees State Income Tax Payable.......... 4,273
Bond Deductions Payable.............................. 2,100
Medical Insurance Payable ............................ 5,500
Salaries Payable ............................................. 58,390
16 Salaries Payable................................................... 58,390
Cash................................................................. 58,390
16 Payroll Tax Expense ............................................ 7,721
Social Security Tax Payable .......................... 5,697
Medicare Tax Payable..................................... 1,424
State Unemployment Tax Payable................. 450
Federal Unemployment Tax Payable............. 150
19 Social Security Tax Payable................................ 11,394
Medicare Tax Payable.......................................... 2,848
Employees Federal Income Tax Payable ........... 17,566
Cash................................................................. 31,808
19 Medical Insurance Payable.................................. 33,000
Cash................................................................. 33,000
Dec. 30 Operations Salaries Expense.............................. 51,400
Officers Salaries Expense ................................... 34,100
Office Salaries Expense ...................................... 8,400
Social Security Tax Payable .......................... 5,634
Medicare Tax Payable..................................... 1,409
Employees Federal Income Tax Payable...... 17,184
Employees State Income Tax Payable.......... 4,226
Bond Deductions Payable.............................. 2,100
Salaries Payable ............................................. 63,347
30 Salaries Payable................................................... 63,347
Cash................................................................. 63,347
30 Payroll Tax Expense ............................................ 7,343
Social Security Tax Payable .......................... 5,634
Medicare Tax Payable..................................... 1,409
State Unemployment Tax Payable................. 225
Federal Unemployment Tax Payable............. 75
30 Employees State Income Tax Payable ............... 25,599
Cash................................................................. 25,599
30 Bond Deductions Payable................................... 4,200
Cash................................................................. 4,200
31 Pension Expense ................................................. 65,000
Cash................................................................. 50,000
Unfunded Pension Liability............................ 15,000
To record pension cost and unfunded
liability.
2.
Dec. 31 Operations Salaries Expense.............................. 5,140
Officers Salaries Expense ................................... 3,410
Office Salaries Expense ...................................... 840
Salaries Payable ............................................. 9,390
Accrued wages for the period.
31 Vacation Pay Expense ......................................... 17,500
Vacation Pay Payable..................................... 17,500
Vacation pay accrued for the period.
