Payroll accounts and year-end entries
Obj. 2, 3, 4
The following accounts, with the balances indicated, appear in the ledger of Garcon Co. on December 1 of the current year:
The following transactions relating to payroll, payroll deductions, and payroll taxes occurred during December:
Instructions
1. Journalize the transactions.
2. Journalize the following adjusting entries on December 31:
1. Salaries accrued: operations salaries, $8,560; officers salaries, $5,600; office salaries, $1,400. The payroll taxes are immaterial and are not accrued.
2. Vacation pay, $15,000.
11-7gProblems: Series B
PR 11-1B
Liability transactions
Obj. 1, 5
The following items were selected from among the transactions completed by Aston Martin Inc. during the current year:
| Apr. 15. |
|
Borrowed $225,000 from Audi Company, issuing a 30-day, 6% note for that amount. |
| May 1. |
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Purchased equipment by issuing a $320,000, 180-day note to Spyder Manufacturing Co., which discounted the note at the rate of 6%. |
| 15. |
|
Paid Audi Company the interest due on the note of April 15 and renewed the loan by issuing a new 60-day, 8% note for $225,000. (Record both the debit and credit to the notes payable account.) |
| July 14. |
|
Paid Audi Company the amount due on the note of May 15.
|
| Aug. 16. |
|
Purchased merchandise on account from Exige Co., $90,000, terms, n/30. |
| Sept. 15. |
|
Issued a 45-day, 6% note for $90,000 to Exige Co., on account. |
| Oct. 28. |
|
Paid Spyder Manufacturing Co. the amount due on the note of May 1. |
| 30. |
|
Paid Exige Co. the amount owed on the note of September 15. |
| Nov. 16. |
|
Purchased store equipment from Gallardo Co. for $450,000, paying $50,000 and issuing a series of twenty 9% notes for $20,000 each, coming due at 30-day intervals. |
| Dec. 16. |
|
Paid the amount due Gallardo Co. on the first note in the series issued on November 16. |
| 28. |
|
Settled a personal injury lawsuit with a customer for $87,500, to be paid in January. Aston Martin Inc. accrued the loss in a litigation claims payable account. |
Instructions
1. Journalize the transactions.
2. Journalize the adjusting entry for each of the following accrued expenses at the end of the current year:
1. Product warranty cost, $26,800.
2. Interest on the 19 remaining notes owed to Gallardo Co.
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