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: 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 U.S. Saving Bond 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 The following transactions relating to payroll, payroll deductions, and payroll taxes occurred during December:

Answer 1

1	Date	Account titles and explanation					Debit	Credit
	Dec 1.	Medical insurance payable					2520
		Cash						2520
		(Medical insurance paid)
	Dec 1.	Social security tax payable					2913
		Medicare tax payable					728
		Employees federal income tax payable					4490
		Cash						8131
		(Issued check for the above liabilities)
	Dec 2.	U.S. Saving bond deduction payable					2300
		Cash						2300
		(Payment for purchase of bonds to bank)
	Dec 12.	Sales salaries expense					14500
		Officers salaries expense					7100
		Office salaries expense					2600
		Social security tax payable						1452
		Medicare tax payable						363
		Employees federal income tax payable						4308
		Employees state income tax payable						1089
		U.S. Saving bond deduction payable						1150
		Medical insurance payable						420
		Salaries payable						15418
		(To record the biweekly payroll)
	Dec 12.	Salaries payable					15418
		Cash						15418
		(To record the payment of biweekly payroll)
	Dec 12.	Payroll tax expense					2220
		Social security tax payable						1452
		Medicare tax payable						363
		State unemployment tax payable						315
		Federal unemployment tax payable						90
		(To record payroll tax expense)
	Dec 15.	Social security tax payable					2904
		Medicare tax payable					726
		Employees federal income tax payable					4308
		Cash						7938
		(Issued check for the above liabilities)
	Dec 26.	Sales salaries expense					14250
		Officers salaries expense					7250
		Office salaries expense					2750
		Social security tax payable						1455
		Medicare tax payable						364
		Employees federal income tax payable						4317
		Employees state income tax payable						1091
		U.S. Saving bond deduction payable						1150
		Salaries payable						15873
		(To record the biweekly payroll)
	Dec 26.	Salaries payable					15873
		Cash						15873
		(To record the payment of biweekly payroll)
	Dec 26.	Payroll tax expense					2009
		Social security tax payable						1455
		Medicare tax payable						364
		State unemployment tax payable						150
		Federal unemployment tax payable						40
		(To record payroll tax expense)
	Dec 30.	Employees state income tax payable					6258
		Cash						6258
		(To record payment of state income tax)
	Dec 30.	U.S. Saving bond deduction payable					2300
		Cash						2300
		(Payment for purchase of bonds to bank)
	Dec 31.	Pension expense					65500
		Cash						55400
		Unfunded pension liability			(65500-55400)			10100
		(To record payment of pension plan)
2a.	Date	Account titles and explanation					Debit	Credit
	Dec 31.	Sales salaries expense					4275
		Officers salaries expense					2175
		Office salaries expense					825
		Salaries payable						7275
		(To record salaries accrued)
2b.	Date	Account titles and explanation					Debit	Credit
	Dec 31.	Vacation pay expense					13350
		Vacation pay payable						13350
		(To record vacation pay accrued)
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