246 Payroll Accounting Chapter 7: Comprehensive Projects-Paper-Based Versions One-Month Project NOTE! Templates needed to complete these exercises, including one containing year-to-date payroll data, are included in the Student Exercise Files download for this course. Ellipses Corp. is a small business that operates in Herndon, VA. The company is located at 10 Period Lane, Herndon, VA 20170. Its federal Employer Identification Number is 77-7777777, and its president, who signs all tax forms, is John Parker (telephone # 571-555-0073). The company does not wish to name a third-party designee on forms. During 2021 four individuals are employed by Ellipses Corp. These employees are as follows: Name Address Social Security # Federal W/H Allowances State W/H Allowances Marital Status Hunter Cranston 85 Southern Road Herndon, VA 20170 111-11-1111 2 2 Married Allison Harrison 203A Pine Court Herndon, VA 20170 777-77-7777 4 3 Married John Parker 212 Tradition Lane Herndon, VA 20170 444-44-4444 1 1 Single Pierre Sternberg 41 Seward Boulevard Herndon, VA 20170 333-33-3333 N/A N/A Married Note that Pierre Sternberg was hired in November, and his first day of work was Friday, November 19. On his W-4 Form Pierre checked box 2c and left sections 3 and 4 blank. Pierre files as married filing jointly on his tax return. Additionally, due to an economic downturn, Allison Harrison was laid off in mid-December, with her las day of work on Thursday, December 9. All employees of Ellipses Corp. work a regular 40-hour workweek (thus all hours worked over 40 in a given wee are overtime hours), receive overtime pay at a rate of 1.5 times the regular wage rate, and are paid weekly on Thursday for the current week (which runs from Friday through Thursday, although employees never work on weekends). The SUTA tax rate applicable to Ellipses Corp. is 3.1%, while the SUTA wage base in Virginia is $8, Earnings and voluntary deduction information for each of the four employees is as follows: Name Regular Wage Rate Annual Salary Weekly 401(k) Deduction Weekly Charitable Contribution Hunter Cranston $15/hour N/A 6% of gross pay $5 Allison Harrison $23/hour N/A 5% of gross pay $5 John Parker N/A $203,000.20 N/A $20 Pierre Sternberg N/A $112,000.20 1% of gross pay N/A Pierre Sternberg SO Federal State Gross Period Earnings Income Tax Income Tax Security Tax Tax Deduction $0 $0 $0 Charitable Cont. $0 $0 SO 1st quarter $0 $0 $0 $0 $0 $0 SO 2nd quarter $0 $0 $0 $0 $0 $0 3rd quarter $0 SO $0 $0 $0 $0 $0 October $0 SO $2,153.85 $338.85 $106.62 $133.54 $31.23 $21.54 $0 November Note that all tax payments and filings are made on the due date. Based on the data provided here, you will complete the following: 1. Establish an employee earnings record for each of the company's four employees. Complete the top portion of each record. each 2. Establish and complete the payroll register for each weekly pay period during December. When calculating federal income tax withholding, use the withholding tables where possible, and refer to the percentage method only when necessary. For simplicity, calculate the state income tax withholding as 5% of would ordinarily be calculated using the applicable state's withholding tables. Payroll checks are remitted to employee's taxable pay (which is the same as taxable pay for FWT). Recall that state income tax withholding the employees in the same order (Cranston, Harrison, Parker, Sternberg) each pay period and are written from a bank account that is used solely for these payments. The first payroll check written in December is check #762. Note that all charitable contributions are deemed to be made on the final day of each pay period. The following information will be required for the completion of these records for the two employees who are compensated via an hourly wage: Weekly Hours Worked Allison Harrison Weekly Start Date Hunter Cranston November 26 40 37 December 3 38 41 December 10 43.5 0 December 17 40 0 December 24 40 0 WARNING! The above dates are weekly start dates. Refer to a calendar to determine the weekly end dates and associated pay dates. Keep in mind that tax liability and payment amounts are determined based on the weekly pay dates. Complete the employee earnings records for December for each of the four employees. Divide the voluntary deductions from the payroll register appropriately across the associated columns within the employee earnings records. If directed to do so by your instructor, record the necessary journal entries for each pay period. One Month Pro 247 The first 11 months of the year have passed, and all payroll-related activity has been properly accounted for an of 11/30/2021. Payroll data for each of the four employees for the first three quarters of the year, as well as for the months of October and November, is as follows: Hunter Cranston Gross Period Earnings Federal Income Tax State 1st quarter $7,800 Income Tax Social Medicare 401(k) $208 Security Tax Tax Deduction Charitable Cont 2nd quarter $366.60 $7,800 $208 $483.60 $113.10 $468 $65 $366.60 3rd quarter $7,800 $208 $483.60 $113.10 $468 565 $366.60 October $2,400 $483.60 $113.10 $468 $65 $64 $112.80 November $2,400 $148.80 $34.80 $144 $20 $64 $112.80 $148.80 $34.80 $144 $20 Allison Harrison Gross Period Earnings Federal Income Tax State Income Tax Social 1st quarter $11,960 $403 Security Tax Medicare Tax 401(k) Deduction Charitable Cont. $568.10 $741.52 2nd quarter $11,960 $173.42 $598 $65 $403 $568.10 $741.52 $173.42 $598 $65 3rd quarter $11,960 $403 $568.10 $741.52 $173.42 $598 $65 October $3,680 $124 $174.80 $228.16 $53.36 $184 $20 November $3,680 $124 $174.80 $228.16 $53.36 $184 $20 John Parker Period Gross Earnings Federal State Income Tax Social Income Tax Security Tax Medicare 401(k) Tax Deduction Charitable Cont. 1st quarter $50,750.05 $10,785.45 $2,537.47 $3,146.52 $735.93 $0 $260 2nd quarter $50,750.05 $10,785.45 $2,537.47 $3,146.52 $735.93 $0 $260 3rd quarter $50,750.05 $10,785.45 $2,537.47 $2,560.56 $735.93 $0 $260 October $15,615.40 $3,318.60 $780.76 $0 $226.44 $0 $80 November $15,615.40 $3,318.60 $780.76 $0 $226.44 $0 $80 Three-Month Project 249 4. Complete Form 941 for the 4th quarter. Note that based on the lookback period, the company is a monthly depositor. Assume that all necessary deposits were made on a timely basis and that the employer made deposits equal to the total amount owed for the quarter. Although Virginia quarterly state payroll forms are also filed by Ellipses Corp., you will not complete these. If directed to do so by your instructor, record the necessary journal entries associated with Form 941 (including those required for any tax payments made). NOTE! Recall from the Form 941 Rounding Considerations section that quarter- and year-end tax figures should not be calculated based on the total taxable earnings for the respective quarter or year Instead, to avoid rounding discrepancies, tax figures within Part 2 of Form 941 should be determined for each employee by adding the individual taxes across each pay period. 5. Complete Form 940 for Ellipses Corp. Note that FUTA payments are made only when required (ie., if the employer is permitted to postpone the payment of these taxes, it will do so until a point in time when payment must be remitted). If directed to do so by your instructor, record the necessary journal entry associated with Form 940. 6. Calculate total SUTA tax owed by the employer. Although Ellipses Corp. will file state forms in which this figure is reported, you are required to calculate only the total amount owed for the year. 7. Complete Copy A of Form W-2 for each of the four employees. State wages were the same as federal wages subject to federal withholding tax for each of the four employees, and the state identification number for Ellipses Corp. is the same as its federal Employer Identification Number. 8. Complete Form W-3 for Ellipses Corp. Note that the company files the paper version of the form and selects "None apply" in the Kind of Employer section. Three-Month Project NOTE! Templates needed to complete these exercises, including one containing year-to-date payroll dat are included in the Student Exercise Files download for this course. Ampersand, Inc., is a small business that operates in Somerset, VT. The company is located at 732 Appalac Way, Somerset, VT 05363. Its federal Employer Identification Number is 44-4444444, and its president, signs all tax forms, is Stacey Jones (telephone #802-555-3917). The company does not wish to name a th party designee on forms. During 2021 four individuals are employed by Ampersand, Inc. These employees are as follows: Address Social Security # Federal W/H Allowances State W/H Allowances Marital Status Name Maggie Hough 13 Spruce Street 222-22-2222 1 1 Single Somerset, VT 05363 7 Smith Boulevard 999-99-9999 2 2 Mar 263 1 Si