Chapter 10 Liabilities 481
The following transactions relating to payroll, payroll deductions, and payroll taxes oc-
curred during December:
Dec. 1 Issued Check No. 728 to Blue Ridge Insurance Company for $3,600, in payment of the
semiannual premium on the group medical insurance policy.
2 Issued Check No. 729 to Montreat National Bank for $15,233, in payment for $6,667 of
FICA tax and $8,566 of employees’ federal income tax due.
3 Issued Check No. 730 for $1,400 to Montreat National Bank to purchase U.S. savings
bonds for employees.
14 Recorded the entry for the biweekly payroll. A summary of the payroll record
follows:
Salary distribution:
Sales $29,000
Officers 13,200
Office 4,500 $46,700
Deductions:
FICA tax $ 3,270
Federal income tax withheld 8,313
State income tax withheld 2,102
Savings bond deductions 700
Medical insurance deductions 600 14,985
Net amount $31,71514 Issued Check No. 738 in payment of the net amount of the biweekly payroll.
14 Recorded the entry for payroll taxes on employees’ earnings of December 14: FICA tax,
$3,270; state unemployment tax, $180; federal unemployment tax, $45.
17 Issued Check No. 744 to Montreat National Bank for $14,853, in payment for $6,540 of
FICA tax and $8,313 of employees’ federal income tax due.
28 Recorded the entry for the biweekly payroll. A summary of the payroll record
follows:Salary distribution:
Sales $29,500
Officers 13,100
Office 4,400 $47,000
Deductions:
FICA tax $ 3,243
Federal income tax withheld 8,366
State income tax withheld 2,115
Savings bond deductions 700 14,424
Net amount $32,57628 Issued Check No. 782 for the net amount of the biweekly payroll.
28 Recorded the entry for payroll taxes on employees’ earnings of December 28: FICA tax,
$3,243; state unemployment tax, $110; federal unemployment tax, $28.
30 Issued Check No. 791 for $12,551 to Montreat National Bank in payment of employees’
state income tax due on December 31.
30 Issued Check No. 792 to Montreat National Bank for $1,400 to purchase U.S. savings
bonds for employees.Instructions
- Record the transactions.
- Record the following adjusting entries on December 31:
a. Salaries accrued: sales salaries, $2,950; officers’ salaries, $1,310; office salaries, $440.
The payroll taxes are immaterial and are not accrued.
b. Vacation pay, $12,900.