Payroll Accounts and Year-End Entries The following accounts, with the balances

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 59,491

Explanation / Answer

Answer 1. Journal Entry Date Particulars Dr. Amt. Cr. Amt. 1-Dec Medicare Insurance Payable      2,520.00    Cash      2,520.00 1-Dec Social Security Tax Payable      2,913.00 Medicare Tax Payable          728.00 Employees Federal Income Tax Payable      4,490.00    Cash      8,131.00 2-Dec Retirement Saving Deductions Payable      2,300.00    Cash      2,300.00 12-Dec Sales Salaries Expense    14,500.00 Officers Salaries Expense      7,100.00 Office Salaries Expense      2,600.00    Social Security Tax Payable      1,452.00    Medicare Tax Payable          363.00    Employees Federal Income Tax Payable      4,308.00    Employees State Income Tax Payable      1,089.00    Retirement Saving Deductions Payable      1,150.00    Medical Insurance Payable          420.00    Salaries Payable    15,418.00 12-Dec Salaries Payable    15,418.00     Cash    15,418.00 12-Dec Payroll Tax Expense      2,220.00    Social Security Tax Payable      1,452.00    Medicare Tax Payable          363.00    SUTA Payable          315.00    FUTA Payable            90.00 15-Dec Social Security Tax Payable      2,904.00 Medicare Tax Payable          726.00 Employees Federal Income Tax Payable      4,308.00     Cash      7,938.00 26-Dec Sales Salaries Expense    14,250.00 Officers Salaries Expense      7,250.00 Office Salaries Expense      2,750.00    Social Security Tax Payable      1,455.00    Medicare Tax Payable          364.00    Employees Federal Income Tax Payable      4,317.00    Employees State Income Tax Payable      1,091.00    Retirement Saving Deductions Payable      1,150.00    Salaries Payable    15,873.00 26-Dec Salaries Payable    15,873.00     Cash    15,873.00 26-Dec Payroll Tax Expense      2,009.00    Social Security Tax Payable      1,455.00    Medicare Tax Payable          364.00    SUTA Payable          150.00    FUTA Payable            40.00 30-Dec Employee State Income Tax Payable      6,258.00    Cash      6,258.00 30-Dec Retirement Saving Deductions Payable      2,300.00    Cash      2,300.00 31-Dec Pension Expense    65,500.00    Cash    55,400.00    Unfunded Pension Liability    10,100.00 Answer 2. Journal Entry Date Particulars Dr. Amt. Cr. Amt. 31-Dec Sales Salaries Expense      4,275.00 Officers Salaries Expense      2,175.00 Office Salaries Expense          825.00     Salaries Payable      7,275.00 31-Dec Vacation Pay Expense    13,350.00    Vacation Pay Payable    13,350.00

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