and Ryan) are union members. OJECT AUDIT Union Dues Both workers in the plant (Homo and Ryan) are union men check-off system, $s is deducted each payday from the plant for union dues, assessments, and initiation fees. A notation to this made on each plant worker's earnings record. On or before the month, the amounts withheld during the preceding month are turne Treasurer of the union. m the plant workers' earning! notation to this effect has been n or before the tenth of each ng month are turned over to the start of each pay period e the Project Audit Test ning en page 7 67 the questions as you ete each pay period. Distribution of Labor Costs Figure 7.5 shows how the salaries and wages are to be charged to the accounts. Wages are to be charged to the labor cost Start of Payroll Project CT AUDIT TEST $12,315.64 October 9, 20- No. 1 The first payroll in October covered the two work weeks that ended on September 26 and October 3. This payroll transaction has been entered for you in the payroll register, the employees' earnings records, the gen- eral journal, and the general ledger. By reviewing the calculations of the wages and deductions in the payroll register and the posting of the infor- mation to the employees' earnings records, you can see the procedure to be followed each payday. Wages and salaries are paid by issuing special payroll checks. When the bank on which they are drawn receives such checks, they will be charged against the pay roll cash account. Observe the following rules in computing earnings each pay period: 1. Do not make any deduction from an employee's earnings if the employee loses less than 15 minutes of time in any day. Time lost that exceeds 15 minutes is rounded to the nearest quarter-hour and deducted. If the time lost by an employee is not to be deducted, the time clerk will make a nota tion to that effect on the Time Clerk's Report. FIGURE 7.5 Glo-Brite Labor Cost Accounts Personnel Accounts to Be Charged Administrative Salaries President (O'Neill) Executive Secretary (Ford) Programmer (Williams) Time Clerk (Russell) Accounting Trainee (Student) Office Salaries Sales Manager (Ferguson) Sales Representative (Mann) Sales Salaries Workers (Bonno and Ryan) Supervisor (Sokowski) } Plant Wages Time Chart Repon No 30 For to Wood Ending October 1.20- Srudens The time clerk prepared Time Clerk Re i nd 19 from the time cards wned by the employees for the work w a s the president, sales manager sales represents and supervisor da roting in and out on the me clock, their records are mor included in the wederks report, but their sal rests be included in the pure The following schedule shows the hourly wage rates of the three hourly employees used in preparing the payroll register for the payday on October 9. le they SI PAY POINTS to three decimal places and then rounded to two places. PAY POINTS partall period The entry required for each employee is recorded in the payroll register. The names of all employees are listed in alphabetical order, including yours as "Stu dent. The fold-out payroll register forms needed to complete this project are bound at the back of the book pages PR-2, PR-3, and PR-4). No deduction has been made for the time lost by Williams. Thus, the total num ber of hours (NO) for which payment was made is recorded in the Regular Earn ings Hours column of the payroll register. However, a notation of the time lost (D) was made in the Time Record column. When posting to Williams's earnings record, 80 hours is recorded in the Regular Earnings Hours column (no deduc tion for the time lost In computing the federal income taxes to be withheld, the wape-bracket tables in Tax Table B at the back of the book were used (pages T-5 to T-14). Each payday, 58 was deducted from the earnings of the two plant workers for union dues (Bonno and Ryan). Payroll check numbers were assigned beginning with check no. 672 In the Labor Cost Distribution columns at the extreme right of the payroll re ister, each employee's gross earnings were recorded in the column that identities che department in which the employee regularly works. The totals of the Labor Cost Distribution columns provide the amounts to be charged to the appropriate salary and wage expense accounts and aid department managers and supervisors in comparing the actual labor costs with the budgeted amounts. Once the net pay of each employee was computed, all the amount columns in the payroll register were footed, proved, and ruled. An entry was made in the journal page 7-24) transferring from the regular cash account to the payroll cash account the amount of the check issued to Pay roll to cover the net amount of the payroll, next, the entry was posted. Payroll Accounting 2020 CHAPTER T. 7-9 Information from the payroll register was posted to the employees' earnings records (see pages 7-42 to 7-46- Note that when posting the deductions for each employee column has been provided in the earnings record for recording each deduction for FIGA IOASDI and HI), FIT, SIT, SUITA, and CIT. All other deductions for each employee are to be totaled and recorded as one amount in the Other Deductions column. Subsid iary ledgers are maintained for Group Insurance Premium Collected and Union Dues Withheld. Thus, any question about the amounts withheld from an employ ce's earnings may be answered by referring to the appropriate subsidiary ledger In this project, your work will not involve any recording in or reference to the subsidiary ledgers The proper journal entry recorded salaries, wages, taxes, and the net amount of cash paid from the totals of the payroll register. The journal entry to record the payroll for the first pay in the fourth quarter appears below and in the general journal (page 7-24). Administrative Sales Sale Sabri mo 55133 FICAT Pwable OASI RICA Tees Payable 41455 Employees SIT Payable Employees SUTA Payable Employees CIT Ryable... Uni Dues Payable Payal Cash 59.35 12.31564 The amounts charged the salary and wage expense accounts were obtained from the totals of the labor Cost Distribution columns in the payroll register. The sal aries and wages were charged as follows: Administrative Salaries Joseph T O'Neill (President) Office Salaries Catherine L Ford Executive Secretary) Virginia A Russell (Time Clerk) Srudent Accounting Trainee) Ruth V Williams (Programmer) Sales Salaries James C. Ferguson (Sales Manager) Dewey W. Mann (Sales Representative) Plant Wages Anthony V Bonno (Mixer Operator) Norman A. Ryan (Electrician) Thomas J. Sokowski (Supervisor) Payroll Accounting 2020 7-10 CHAPTER 7. Payroll Project Taxes Payable-HI were credited for oyees SIT Payable, Employees SUTA Payable, FICA Taxes PayableOASD I CAT Pavable-H were ployees' wages. $958,33 and $224.14, respectively, the amounts deducted from employees Employees FIT Payable, Employees SIT Payable, Employees SU ed for the total Employees CIT Payable, and Union Dues Payable were credited for the In subsequent amount withheld for each kind of deduction from employees' wages. In subs pyroll transactions, Group Insurance Premium Collected will be credited for the amounts withheld from employees' was for this type of deduction. Finally, Fay roll Cash was credited for the sum of the nct amounts paid all employees. The payroll taxes for this pay were then recorded in the general journal page 7-24) as follows: Payroll Taxes......... 1,38161 FICA Taves Payable OASDI ......... 958.32 FKA Taxes Payable-H... 224.12 FUTA Tavs Payable 22.91 SUTA Taves Payable Employer..... 176.26 Payroll Taxes was debited for the sum of the employer's FICA, FUTA, and SUTA taxes. The taxable carnings used in computing each of these payroll taxes were obtained from the appropriate column totals of the payroll register. Note that only part of Ford's wages are taxable ($700 out of $1,220 gross pay) for FUTA ($7,000 limit). The computation of the debit to Payroll Taxes was: FICAOASDE 6.2% of $15,456.77 = 595832 FKA-HE 1.45% of $15,456.77 = 224.12 0.6% of $3,818.00 22.91 3.6890of 4.778.00 = 176.26 Total Payroll Taxes.. $1381.61 FUTA: SUTA FICA Taxes Payable-OASDI was credited for $958.32, the amount of the lia- bility for the employer's portion of the tax. FICA Taxes Payable-HI was cred- ited for S224.12, the amount of the liability for the employer's share of this tax. FUTA Taxes Payable was credited for the amount of the tax on the employer for federal unemployment purposes ($22.91). SUTA Taxes Payable Employer was credited for $176.26, which is the amount of the contribution required of the employer under the state unemployment compensation law. The journal entries were posted to the proper ledger accounts (pages 7-33 to 7-40). October 15 This is the day on which the deposits of FICA and FIT taxes and the city of Phil- adelphia income taxes for the September payrolls are due. However, in order to concentrate on the fourth-quarter payrolls, we will assume that the deposits for the third quarter and the appropriate entries were already completed. October 20 No.2 On this date, Glo-Brite Paint Company must deposit the Pennsylvania state income taxes withheld from the October 9 payroll. The deposit rule states that if the employer expects the aggregate amount withheld each quarter to be $1,000 or more, the employer must pay the withheld tax semimonthly. The tax must be remitted within three banking days after the close of the semimonthly periods ending on the 15th and the last day of the month. Prepare the journal entry to record the deposit of the taxes, and post to the appropriate ledger accounts. Pennsylvania has eliminated the filing of paper forms (replaced by telefile or online filing). The information needed to telefile is listed on Payroll Accounting 2020 CHAPTER 7. 7-11 LO 1 Prepare payrollregies THOJECT AUDIT TEST page 7-50% complete the information worksheet needed for the first semimonthly period of October. The company's Pennsylvania cimployer account number is 000-0-3300, its EIN is 00-0000660. its filing pass- word is GBPCOM, and its telephone number is (2151555-9559. October 23 No. 3 Prepare the payroll for the last pay period of October from Time Clerk's Report Nos. 40 and 41. The proper procedure in recording the payroll follows: Complete the payroll register In as much as only a portion of the payroll register sheet was used in recording the October 9 payroll, the October 23 payroll should be recorded on the same sheet to save space. On the first blank ruled line after the October 9 payroll, insert "Payday October 23-For Period Ending October 17, 20-- On the following lines, record the payroll information for the last pay date of October. When recording succeeding payrolls, continue to conserve space by recording two payrolls on each separate payroll register sheet. The workers in the plant (Bonno and Ryan) are paid time and a half for any hours worked over eight each workday and for work on Saturdays and are paid twice the regular hourly rate for work on Sundays or holidays. With this pay period, the chalative earnings of several employees exceed the taxable income base set up by FUTA and SUTA. This factor must be considered in preparing the payroll register and in computing the employer's payroll taxes. Refer to each employee's earnings record to see the amount of cumulative earnings. Net Paid $12,376.89 PAY POINTS Even though they are not on the time clerk's report, remember to pay the president, sales manager sales representatives, and supervisors. Time Clerk's Report No. 40 For the Week Ending October 10, 20- Time LO 2 Maintain employees' earnings records Time Record Tims Employee S M T W T F S Worked Bonno, AV 8 8 8 8 8 4 Ford, C. L. ...... 4 8 8 8 8 Russell. V. A. . . 8 8 8 8 Ryan. N. A. ..... 8 8 8 8 8 40 hrs Student ......... 8 8 8 8 4 36 hrs. Williams RV 8 8 8 8 8 Time lost on account of death of relative; charped against annual personal leave; no deduction 44 hrs. 36 hrs. 40 hrs. 40 hrs. Time Clerk's Report No. 41 For the Week Ending October 17, 20- Time Last Employee S S Bonno, A. V. ... Ford, C. L. ..... Russell, V. A. ... Ryan, N. A..... Student...... Williams, R. V... M 8 8 8 8 8 8 Time Record T W T 8 8 8 8 8 8 8 8 8 8 8 8 8 8 8 8 8 8 F 8 8 8 8 4 8 Time Worked 40 hrs. 40 hrs. 40 hrs. 48 hrs. 36 hrs. 40 hrs. 8 Payroll Accounting 2020 7-12 Om r onttorit LO 3 PAY POINTS The m ees Pennylvana State Unem oyment STATIS C ated on the local de o ch employee. There is a taxable wage limit on the employees portion of the tax Payroll as the ne Make the entry transferring from Cash of the total payroll, and post Post the required information from the payroll reste enplayee's earnings record Record in the journal the salaries, wages taxes withheld, group ce premium collected, union dues withheld, and net amount and post to the proper ledger accounts The entry required to record the October 23 payroll is the same as that to record the October 9 payroll, except it is necessary to record the bility for the amount withheld from the employees' wages to pay part of the group insurance premium. The amount withheld should be recorded as a credit to Group Insurance Premium Collected Record in the journal the employer's payroll taxes and the abilities created; post to the appropriate ledger accounts. November 4 No.4 Deposit with the state of Pennsylvania the amount of state income taxes withheld from the October 23 payroll and complete information worksheet. No.5 Virginia Russell completed a new Form W 4. changing the number of withholding allowances to 2. Change Russell's earnings record (her mar ital status has not changed). No. 6 Thomas J. Sokowski completed a new Form W.4, showing that his mar- ital status changed to single and that the number of withholding allow- ances remains at 2. Change Sokowski's earnings record accordingly. No. 7 Dewey Mann completed a new Form W-4, leaving his marital status as married but dropping the number of withholding allowances to 0. Change Mann's earnings record accordingly. November 6 No. 8 Pay the treasurer of the union the amount of union dues withheld during the month of October PAY POINTS Be sure to deduct 300 premium for each $1,000 of group insurance carried by each employee last payday of each monthl. PROTECT AUDIT TEST Net Paid $12.180.03 Time Worked Time Lost Time Clerk's Report No. 42 For the Week Ending October 24, 20- Time Record Employee IS M T W T F S Bonno, AV.... 8 8 8 8 8 Ford. C L... 8 8 8 8 8 Russell, V A. ... 8 8 8 8 6 Ryan, N. A ... 8 8 8 8 8 Student ....... 8 8 8 8 4 Williams, R. V... 8 8 8 7 8 40 hrs. 40 hrs. 38 hrs. 40 hrs. 36 hrs. 39 hrs. Time lost on account of family function; deduct 2 hours pay Time lost because of tardiness deduct I hour's pay. Payroll Accounting 2020 CHAPTER 7 P ropert Time Clark's Report No. 43 For the Week Ending October 31, 20.. Employee S M Time Record T W T F S Russell, VA Ryan. N. A. ... 8 8 8 8 8 B 8 8 8 8 8 8 8 8 8 8 8 8 4 8 8 8 PAY POINTS Make changes in November 6 pay. Refer to No 5.6 and 7. PROJECT AUDIT TEST Net Paid $ 1,494.06 No.9 Prepare the payroll for the first pay tried in November from Time Clerk's Report Nos. 42 and 43 and record the paychecks issued to all employees Record this payroll at the top of the second payroll register sheet. Note: Virginia Russell worked only 38 hours in the week ending Octo- ber 24. Therefore, compute her pay for that week by multiplying 38 by $15.00 her hourly ratel Rich Willy worked only 39 hours in the week ending October 24. Therefore, compute her pay for that week by multiplying 39 by $15.29 (her hourly rate). Also, record the employer's payroll taxes. November 13 No. 10 Because of her excessive fardiness and absenteeism during the year, the company discharged Rab Williams today. For the week ending Novem- ber 7, she was late a total of six hours and for this week, sbe missed two full days and was late two hours on another day. In lieu of two weeks' notice, Williams was given two full weeks' pay ($1,223.08). Along with her dismissal pay ($1,223.08), she was paid for the week ending Novem- ber 7 (34 hours, or $$19.86) and the days worked this current week (22 hours, or $336.38). The total pay for the two partial weeks is $856.24. Record a separate payroll register (on one line) to show Williams's total earnings, deductions, and net pay. The two weeks' dismissal pay is subject to all payroll taxes. Include dismissal pay with the total earnings but do not show the hours in the Time Record columns. Use the tax table for the biweekly payroll period for the total gross pay $2,079.321 of Williams. The deduction for group insurance premiums is $14.40. In the Time Record column, make a note of Williams's discharge as of this date. Indicate the payroll check number used to prepare the final check for Williams. When posting to the earnings record, make a notation of Wild liams's discharge on this date. Prepare the journal entries to transfer the net cash and to record Wil- liams's final pay and the employer's payroll taxes. Post to the ledger accounts. 3 Use the blank Form W-2 on page 7-59. Box "a" should be left blank, since Glo-Brite Paint Company does not use a control number to identify individual Forms W-2. PAY POINTS Prepare a Wage and Tax Statement Form W-2 to be given to Wliams Payroll Accounting 2010 LO4 outros doutna ction the a PAY POINTS On all tax and derosit forms requiring a signature use Joseph O'Neill name November 16 No. 1 Hlectronically deposit the FICA Fases and federal income for the October payrolls and complete the Federal Deposit Informa Worksheet page 749). Since the company is subject to the man posit rule, the deposit is due on the Sth of the following month. See deposit requirements explained on papes 1-17 11-19 November 15 Sunday: therefore, the deposit is to be made on the next business Prepare the journal entry to record the deposit of the taxes, and pont the appropriate ledger accounts No. 12 Since Glo-Brite Paint Company withholds the city of Philadelphia income tax, you must deposit the taxes with the Department of Roc The deposit rule that affects Glo-Brite Paint Company states that withheld taxes are between $150 and $16,000 per month, the company must deposit the tax monthly by the 15th of the following month withheld taxes for the October payrolls were $1,212.21. Prepare the journal entry to record the deposit of the taxes, and post to the appropriate ledger accounts. Complete the Philadelphia Emplover's Return of Tax Withheld cou pon Monthly Wage Tax), which appears on page 7.51. November 17 No. 13 Prepare an employee's carnings record for Beth Anne Woods, a new employee who began work today, Tuesday, Woods is single and claims one withholding allowance. She is employed as a programmer at a monthly salary of $2,600. Address, 8102 Franklin Court, Philadelphia, PA 19105- 0915. Telephone, 555-1128. Social Security No. 000-00-1587. She is eli- gible for group insurance coverage of $47,000 immediately, although her first deduction for group insurance will not be made until December 18. Department: Office Weekly rate: $600.00 Hourly rate: $15.00 November 18 No. 14 Deposit with the state of Pennsylvania the amount of state income taxes withheld from the November 6 and 13 (Ruth Williams) payrolls and complete the information worksheet. November 20 PROJECT AUDIT TEST Net Paid 59.425.15 No. 15 With this pay, the company has decided to offer employees a Savings Incentive Match Plan for Employees (SIMPLE Retirement Plan). Most of the employees opted to wait until the start of the following year to participate. However, the following employees have decided to take part in the plan for the remaining pay periods of the year. Lames Ferguson $500 contribution per pay period Dewey Mann: $250 contribution per pay period Joseph O Neilt $700 contribution per pay period Norman Ryan $200 contribution per pay period The contributions are to be deducted from the participating employee's pay and are excluded from the employee's income for federal income tax purposes. The other payroll taxes still apply. On the payroll registers and the earnings record, use the blank column under "Deductions for these contributions. Use the term "SIMPLE" as the new heading for this deduce tion column (on both the payroll register and employee's earnings record). Payroll Aeg 03 LHFIER 2015 Use the account in the general ledger for SIMPLE Contributions Payable account nu. 29. The company must match these contributions dollar for dallat, up to 3 percent of the employee's compensation. These payments will be pro cessed through the Arts Payable Department Prepare the payroll for the last pay period of November from Time Clerk's Rear Nos, 44 and 45, and record the paychecks issued to all employees. Al record the employer's payroll taxes. Time Clark's Report No 44 For the Week Ending November 7. 20- PAY POINTS Remember to the premiums on the group Employee 5 M Time Red T W T F S Zhr Ford. C. L. Russell, VA Ryan NA Student RV "Time of personal business Times of radi alects par Time Clark's Report No 45 For the Week Ending November 14, 20 Employees Time Record T W T Time Worked S M F S Fund.CL Russell, VA Ryan, N. A..... 8 8 8 8 40 hrs 40 hrs. 16hrs 22 hrs. W RV D D 8 6 8 "Time low hea of andineweler y e ne delust 1 hour PAY POINTS No. 16 Salary increases of $30 per week, effective for the two weeks covered in the December 4 payroll, are given to Catherine L Ford and Virginia A. Russell. The group insurance coverage for Ford will be increased to $50,000; for Russell, it will be increased to $49,000. Update the employ ces' earnings records accordingly. The new wage rates are listed below. The new wage rates are efective for the December 4 padi Hourly Rate Employee Ford, Catherine Weekly Rate 5640.00 63000 $1600 15.15 7-16 CHAPTERT Tool Polect Payroll Accounting 2020 November 30 No. 1 Prepare an employee's marines l o ident's nephew, who he can work toda Younis single and in withholding allowance. He is training as a field sales repres 3 0 the city where the home office is leated His beginning a 1 07 per month. Address, 7016 Holmes Drive, Philadelphia, PA 1 Telephone, 555.2096, Social Security No 000.00-6057. Young is en for croup insurance coverage of 549.000 Department Sales Weekly rate 5630.00 Hourly rate: 15.75 December 3 No. 18 Deposit with the state of Pennsylvania the amount of state income taxe withheld from the November 20 roll usine General Ledger balance for Account No. 25 and complete the information worksheet. DECT AUDIT TEST December 4 No. 19 Prepare the payroll for the first biweekly pay period of December from Time Clerk Report Nos. 46 and 47, and record the paychecks issued to all employees. Record this payroll ar rhe top of the third payroll register sheet. Note: Thursday, November 26, is a paid holiday for all workers. Also, record the employer's payroll taxes. Paid S10970.92 Time Test Time Clerk's Report No. 46 For the Week Ending November 21, 20. Time Record Time Employee S M T W T F S Bonno, A.V.... 8 8 8 8 8 40 hrs. Ford, C. L. ..... 8 8 8 8 8 40 hrs. Russell, VA 8 8 8 8 8 40 hrs. Ryan, N. A... 8 8 8 4 8 36 hrs. Srudent........ 8 8 8 4 8 36 hrs. Woods, BA 8 8 8 8 32 hrs. 4 hrs. "Time out on account of personal busines; deduct 4 hours' pay. Time Lost Time Clerk's Report No. 47 For the Week Ending November 28, 20- Time Record Time Employee S M T W T F S Worked Bonno, A. V. .... 8 8 8 8 8 48 hrs. Ford, C. L. ..... 8 8 8 e 8 40 hrs. Russell, V A..... 8 8 8 8 40 hrs. Ryan, N. A...... 9 10 8 8 43 hrs. Scudent......... 8 8 8 e 4 36 hrs. Woods, B. A..... 8 8 8 8 40 hrs. "Double time. Payroll Accounting 2020 CHAPTER 7-17 PAY POINTS This final pays not subject to withholding for FIT, SIT, CIT purposes No, 20 Anthony V. Homo reports the birth of a son and completes an amended Form W.4, showing his total withholding allowances to be five. Change his earnings record accordingly, effective with the December 18 y. No. 21 Boch Amboy Hanno and Norway have been notified that their union dues will increase to 59 per pay, starting with the last pay period of the year. Reflect these increases in the December 18 pory and show the changes on their earnings records. December 9 No. 22 Pay the treasurer of the union the amount of union dues withheld during the month of November December 11 No. 23 The Payroll Department was informed that Virgin A. Russell died in an automobile accident on her way home from work Thursday, December 10. December 14 No. 24 Make a separate entry on one line in the payroll register to record the issuance of a check payable to the Estate of Virginia A. Russell. This check covers Russell's work for the weeks ending December 5 and 12 ($1,134.00) plus her accrued vasation pay $1.260.00. Do not show the vacation hours in the Time Record columns on the payroll register, but include them in the Total Earnings column. Russell's final biweekly pay for time worked and the vacation pay are subject to FICA, FUTA, and SUTA employer and employee) taxes. Since Russell's cumulative earnings have surpassed the taxable earnings figures established by FUTA and SUTA, there will not be any unemployment tax on the employer. The deduction for group insurance premiums is $14.70. 2 Make a notation of Russell's death in the payroll register and on her earnings record Prepare journal entries to transfer the net pay and to record Russell's final pay and the employer's payroll taxes. Post to the ledger accounts. Include the final gross pay ($2,394.00) in Boxes 3 and 5, but not in Boxes 1, 16, and 18. Use the blank Form W-2 on page 7-59. In addition, the last wage payment and vacation pay must be reported on Form 1099-MISC. A Form 1096 must also be completed. These forms will be completed in February before their due date. (See Transaction Nos. 41 and 42 on page 7-66.) PROJECT AUDIT TEST Net Paid $2.194.72 PAY POINTS Prepare a Wage and Tax Statement, Form W-2 which will be given to the executor of the estate along with the final paycheck December 15 No. 25 Electronically deposit the amount of FICA taxes and federal income taxes for the November payrolls and complete the Federal Deposit Infor- mation Worksheet. No, 26 Deposit with the city of Philadelphia the amount of city income taxes withheld from the November payrolls. December 18 No. 27 Deposit with the state of Pennsylvania the amount of state income taxes withheld from the December 4 payroll and complete the information worksheet. ene Payroll Accounting 2020 7-18 CHAPTER 7. Patoll Payroll Accou insurance company that there will be mber on the policy for Virginia No. 28 Glo-Brite has been notified by the insurance company no premium chance for the month of December on the pole Kassell. Prepare the entry for the check made payable to the Virginia A Russell for the amount that was withheld for ins was withheld for insurance from her December 14 pay. hings record for Richard Lloyd Zimmerman, ance. Zimmerman is eligible PROJECT AUDIT TEST Net Paid $52.905.17 No. 29 Prepare an emplove's earnings record for Richard Lloyd cant by the who was employed today as time clerk t ake the place left vacant by death of Virginia A Russell last week. His beginning salary 15 salary is $2,600 per month. Address, 900 South Clark Street Philadelphia, PA 19195-62 Telephone, 555-2104. Social Security No. 000-00-1502. Zimmerm married and claims one withholding allowance Zimmerman of group insurance coverage of $47.000. although no deduction on group insurance premiums will be made until the last payday in Jan Department: Office Weekly rate: $600.00 Hourly rate: $15.00 No. 30 Prepare the payroll for the latter pay of December from Time Report Nos, 48 and 49 and record the paychecks issued to all employees Also, record the employer's payroll taxes. Effective with this pay, O'Neill completed a new Form W-4, changing his total withholding allowances to four. Previously, he had claimed tewer allowances than he had been using on his tax return. Change his carn- ings record accordingly. In this pay, the president of the company, Joseph O'Neill, is paid his annual bonus. This does not affect O'Neill's insurance coverage, which is based on regular pay. This year, his bonus is $85,000. For withholding purposes, the bonus is considered a supplemental payment and is added to his gross pay, and the aggregate amount is taxed. For this pay, O'Neill has increased his SIMPLE deduction to $4,000. To determine the federal income tax, use the Table of Allowance Values along with Tax Table A pages T-2 to T-4). In calculating the tax, do not round the aggregate to the nearest earnings dollar. In this pay, O'Neill has reached the OASDI ceiling. To calculate O'Neill's OASDI tax, multiply the OASDI ceiling of $132.900 by 6.2 percent and then subtract the year-to-date OASDI taxes withheld up to this pay. (Use O'Neill's Employee Earnings Record to view his year-to-date OASDI tax withheld). PAY POINTS Remember to deduct the premiums on the group insurance for each employee. Mote: After posting the information for this last pay to the employees' earings records, calculate and enter the quarterly and yearly totals on each earnings record. Time Clerk's Report No. 48 For the Week Ending December 5, 20- Time Record Time Is M T W T F S Worked Time Lost Employee Bonno, A. V. ... 14 8 8 8 8 Ford, C.L...... 8 8 8 8 Russell, V. A. ... 8 8 8 8 Ryan, N. A..... 8 9 9 9 Student ........ 8 8 7 8 Woods, B. A. ... 8 8 8 8 Young, P. W. ... 8 8 8 8 "Time lost because of tardiness: deduct 1 hour's pay. 8 8 8 9 4 8 8 44 hrs. 40 hrs. 40 hrs. 44 hrs. 35 hrs. 40 hrs. 40 hrs. 1 hr. Payroll Accounting 2020 CHAPTER 7. Payroll Project 7-19 Time Lost Time Clerk's Report No. 49 For the Week Ending December 12, 20-- Time Record Time Employee IS M T W T F S Worked Bonno, A. V. ... 8 8 8 8 8 8 48 hrs. Ford, C. L. ..... 4 8 8 8 8 36 hrs. Russell, V. A. ... 8 8 8 8 D 32 hrs. Ryan, N. A. .... 10 8 8 9 8 43 hrs. Student...... 4 8 8 8 4 32 hrs. Woods, B. A. ... 8 8 8 8 8 40 hrs. Young, P. W. ... 8 8 8 8 8 40 hrs. "Time spent in training session; no deduction in pay, **Time lost in dentist appointment; no deduction in pay. 4 hrs. 8 hrs. 4 hrs. Note: This completes the project insofar as recording the payroll transac- tions for the last quarter is concerned. The following additional transactions are given to illustrate different types of transactions arising in connection with the accounting for payrolls and payroll taxes. Record these transactions in the jour- nal, but do not post to the ledger. PROJECT AUDIT TES End-of-Year Activities January 6 No. 31 Deposit with the state of Pennsylvania the amount of state income taxes and Ryan) are union members. OJECT AUDIT Union Dues Both workers in the plant (Homo and Ryan) are union men check-off system, $s is deducted each payday from the plant for union dues, assessments, and initiation fees. A notation to this made on each plant worker's earnings record. On or before the month, the amounts withheld during the preceding month are turne Treasurer of the union. m the plant workers' earning! notation to this effect has been n or before the tenth of each ng month are turned over to the start of each pay period e the Project Audit Test ning en page 7 67 the questions as you ete each pay period. Distribution of Labor Costs Figure 7.5 shows how the salaries and wages are to be charged to the accounts. Wages are to be charged to the labor cost Start of Payroll Project CT AUDIT TEST $12,315.64 October 9, 20- No. 1 The first payroll in October covered the two work weeks that ended on September 26 and October 3. This payroll transaction has been entered for you in the payroll register, the employees' earnings records, the gen- eral journal, and the general ledger. By reviewing the calculations of the wages and deductions in the payroll register and the posting of the infor- mation to the employees' earnings records, you can see the procedure to be followed each payday. Wages and salaries are paid by issuing special payroll checks. When the bank on which they are drawn receives such checks, they will be charged against the pay roll cash account. Observe the following rules in computing earnings each pay period: 1. Do not make any deduction from an employee's earnings if the employee loses less than 15 minutes of time in any day. Time lost that exceeds 15 minutes is rounded to the nearest quarter-hour and deducted. If the time lost by an employee is not to be deducted, the time clerk will make a nota tion to that effect on the Time Clerk's Report. FIGURE 7.5 Glo-Brite Labor Cost Accounts Personnel Accounts to Be Charged Administrative Salaries President (O'Neill) Executive Secretary (Ford) Programmer (Williams) Time Clerk (Russell) Accounting Trainee (Student) Office Salaries Sales Manager (Ferguson) Sales Representative (Mann) Sales Salaries Workers (Bonno and Ryan) Supervisor (Sokowski) } Plant Wages Time Chart Repon No 30 For to Wood Ending October 1.20- Srudens The time clerk prepared Time Clerk Re i nd 19 from the time cards wned by the employees for the work w a s the president, sales manager sales represents and supervisor da roting in and out on the me clock, their records are mor included in the wederks report, but their sal rests be included in the pure The following schedule shows the hourly wage rates of the three hourly employees used in preparing the payroll register for the payday on October 9. le they SI PAY POINTS to three decimal places and then rounded to two places. PAY POINTS partall period The entry required for each employee is recorded in the payroll register. The names of all employees are listed in alphabetical order, including yours as "Stu dent. The fold-out payroll register forms needed to complete this project are bound at the back of the book pages PR-2, PR-3, and PR-4). No deduction has been made for the time lost by Williams. Thus, the total num ber of hours (NO) for which payment was made is recorded in the Regular Earn ings Hours column of the payroll register. However, a notation of the time lost (D) was made in the Time Record column. When posting to Williams's earnings record, 80 hours is recorded in the Regular Earnings Hours column (no deduc tion for the time lost In computing the federal income taxes to be withheld, the wape-bracket tables in Tax Table B at the back of the book were used (pages T-5 to T-14). Each payday, 58 was deducted from the earnings of the two plant workers for union dues (Bonno and Ryan). Payroll check numbers were assigned beginning with check no. 672 In the Labor Cost Distribution columns at the extreme right of the payroll re ister, each employee's gross earnings were recorded in the column that identities che department in which the employee regularly works. The totals of the Labor Cost Distribution columns provide the amounts to be charged to the appropriate salary and wage expense accounts and aid department managers and supervisors in comparing the actual labor costs with the budgeted amounts. Once the net pay of each employee was computed, all the amount columns in the payroll register were footed, proved, and ruled. An entry was made in the journal page 7-24) transferring from the regular cash account to the payroll cash account the amount of the check issued to Pay roll to cover the net amount of the payroll, next, the entry was posted. Payroll Accounting 2020 CHAPTER T. 7-9 Information from the payroll register was posted to the employees' earnings records (see pages 7-42 to 7-46- Note that when posting the deductions for each employee column has been provided in the earnings record for recording each deduction for FIGA IOASDI and HI), FIT, SIT, SUITA, and CIT. All other deductions for each employee are to be totaled and recorded as one amount in the Other Deductions column. Subsid iary ledgers are maintained for Group Insurance Premium Collected and Union Dues Withheld. Thus, any question about the amounts withheld from an employ ce's earnings may be answered by referring to the appropriate subsidiary ledger In this project, your work will not involve any recording in or reference to the subsidiary ledgers The proper journal entry recorded salaries, wages, taxes, and the net amount of cash paid from the totals of the payroll register. The journal entry to record the payroll for the first pay in the fourth quarter appears below and in the general journal (page 7-24). Administrative Sales Sale Sabri mo 55133 FICAT Pwable OASI RICA Tees Payable 41455 Employees SIT Payable Employees SUTA Payable Employees CIT Ryable... Uni Dues Payable Payal Cash 59.35 12.31564 The amounts charged the salary and wage expense accounts were obtained from the totals of the labor Cost Distribution columns in the payroll register. The sal aries and wages were charged as follows: Administrative Salaries Joseph T O'Neill (President) Office Salaries Catherine L Ford Executive Secretary) Virginia A Russell (Time Clerk) Srudent Accounting Trainee) Ruth V Williams (Programmer) Sales Salaries James C. Ferguson (Sales Manager) Dewey W. Mann (Sales Representative) Plant Wages Anthony V Bonno (Mixer Operator) Norman A. Ryan (Electrician) Thomas J. Sokowski (Supervisor) Payroll Accounting 2020 7-10 CHAPTER 7. Payroll Project Taxes Payable-HI were credited for oyees SIT Payable, Employees SUTA Payable, FICA Taxes PayableOASD I CAT Pavable-H were ployees' wages. $958,33 and $224.14, respectively, the amounts deducted from employees Employees FIT Payable, Employees SIT Payable, Employees SU ed for the total Employees CIT Payable, and Union Dues Payable were credited for the In subsequent amount withheld for each kind of deduction from employees' wages. In subs pyroll transactions, Group Insurance Premium Collected will be credited for the amounts withheld from employees' was for this type of deduction. Finally, Fay roll Cash was credited for the sum of the nct amounts paid all employees. The payroll taxes for this pay were then recorded in the general journal page 7-24) as follows: Payroll Taxes......... 1,38161 FICA Taves Payable OASDI ......... 958.32 FKA Taxes Payable-H... 224.12 FUTA Tavs Payable 22.91 SUTA Taves Payable Employer..... 176.26 Payroll Taxes was debited for the sum of the employer's FICA, FUTA, and SUTA taxes. The taxable carnings used in computing each of these payroll taxes were obtained from the appropriate column totals of the payroll register. Note that only part of Ford's wages are taxable ($700 out of $1,220 gross pay) for FUTA ($7,000 limit). The computation of the debit to Payroll Taxes was: FICAOASDE 6.2% of $15,456.77 = 595832 FKA-HE 1.45% of $15,456.77 = 224.12 0.6% of $3,818.00 22.91 3.6890of 4.778.00 = 176.26 Total Payroll Taxes.. $1381.61 FUTA: SUTA FICA Taxes Payable-OASDI was credited for $958.32, the amount of the lia- bility for the employer's portion of the tax. FICA Taxes Payable-HI was cred- ited for S224.12, the amount of the liability for the employer's share of this tax. FUTA Taxes Payable was credited for the amount of the tax on the employer for federal unemployment purposes ($22.91). SUTA Taxes Payable Employer was credited for $176.26, which is the amount of the contribution required of the employer under the state unemployment compensation law. The journal entries were posted to the proper ledger accounts (pages 7-33 to 7-40). October 15 This is the day on which the deposits of FICA and FIT taxes and the city of Phil- adelphia income taxes for the September payrolls are due. However, in order to concentrate on the fourth-quarter payrolls, we will assume that the deposits for the third quarter and the appropriate entries were already completed. October 20 No.2 On this date, Glo-Brite Paint Company must deposit the Pennsylvania state income taxes withheld from the October 9 payroll. The deposit rule states that if the employer expects the aggregate amount withheld each quarter to be $1,000 or more, the employer must pay the withheld tax semimonthly. The tax must be remitted within three banking days after the close of the semimonthly periods ending on the 15th and the last day of the month. Prepare the journal entry to record the deposit of the taxes, and post to the appropriate ledger accounts. Pennsylvania has eliminated the filing of paper forms (replaced by telefile or online filing). The information needed to telefile is listed on Payroll Accounting 2020 CHAPTER 7. 7-11 LO 1 Prepare payrollregies THOJECT AUDIT TEST page 7-50% complete the information worksheet needed for the first semimonthly period of October. The company's Pennsylvania cimployer account number is 000-0-3300, its EIN is 00-0000660. its filing pass- word is GBPCOM, and its telephone number is (2151555-9559. October 23 No. 3 Prepare the payroll for the last pay period of October from Time Clerk's Report Nos. 40 and 41. The proper procedure in recording the payroll follows: Complete the payroll register In as much as only a portion of the payroll register sheet was used in recording the October 9 payroll, the October 23 payroll should be recorded on the same sheet to save space. On the first blank ruled line after the October 9 payroll, insert "Payday October 23-For Period Ending October 17, 20-- On the following lines, record the payroll information for the last pay date of October. When recording succeeding payrolls, continue to conserve space by recording two payrolls on each separate payroll register sheet. The workers in the plant (Bonno and Ryan) are paid time and a half for any hours worked over eight each workday and for work on Saturdays and are paid twice the regular hourly rate for work on Sundays or holidays. With this pay period, the chalative earnings of several employees exceed the taxable income base set up by FUTA and SUTA. This factor must be considered in preparing the payroll register and in computing the employer's payroll taxes. Refer to each employee's earnings record to see the amount of cumulative earnings. Net Paid $12,376.89 PAY POINTS Even though they are not on the time clerk's report, remember to pay the president, sales manager sales representatives, and supervisors. Time Clerk's Report No. 40 For the Week Ending October 10, 20- Time LO 2 Maintain employees' earnings records Time Record Tims Employee S M T W T F S Worked Bonno, AV 8 8 8 8 8 4 Ford, C. L. ...... 4 8 8 8 8 Russell. V. A. . . 8 8 8 8 Ryan. N. A. ..... 8 8 8 8 8 40 hrs Student ......... 8 8 8 8 4 36 hrs. Williams RV 8 8 8 8 8 Time lost on account of death of relative; charped against annual personal leave; no deduction 44 hrs. 36 hrs. 40 hrs. 40 hrs. Time Clerk's Report No. 41 For the Week Ending October 17, 20- Time Last Employee S S Bonno, A. V. ... Ford, C. L. ..... Russell, V. A. ... Ryan, N. A..... Student...... Williams, R. V... M 8 8 8 8 8 8 Time Record T W T 8 8 8 8 8 8 8 8 8 8 8 8 8 8 8 8 8 8 F 8 8 8 8 4 8 Time Worked 40 hrs. 40 hrs. 40 hrs. 48 hrs. 36 hrs. 40 hrs. 8 Payroll Accounting 2020 7-12 Om r onttorit LO 3 PAY POINTS The m ees Pennylvana State Unem oyment STATIS C ated on the local de o ch employee. There is a taxable wage limit on the employees portion of the tax Payroll as the ne Make the entry transferring from Cash of the total payroll, and post Post the required information from the payroll reste enplayee's earnings record Record in the journal the salaries, wages taxes withheld, group ce premium collected, union dues withheld, and net amount and post to the proper ledger accounts The entry required to record the October 23 payroll is the same as that to record the October 9 payroll, except it is necessary to record the bility for the amount withheld from the employees' wages to pay part of the group insurance premium. The amount withheld should be recorded as a credit to Group Insurance Premium Collected Record in the journal the employer's payroll taxes and the abilities created; post to the appropriate ledger accounts. November 4 No.4 Deposit with the state of Pennsylvania the amount of state income taxes withheld from the October 23 payroll and complete information worksheet. No.5 Virginia Russell completed a new Form W 4. changing the number of withholding allowances to 2. Change Russell's earnings record (her mar ital status has not changed). No. 6 Thomas J. Sokowski completed a new Form W.4, showing that his mar- ital status changed to single and that the number of withholding allow- ances remains at 2. Change Sokowski's earnings record accordingly. No. 7 Dewey Mann completed a new Form W-4, leaving his marital status as married but dropping the number of withholding allowances to 0. Change Mann's earnings record accordingly. November 6 No. 8 Pay the treasurer of the union the amount of union dues withheld during the month of October PAY POINTS Be sure to deduct 300 premium for each $1,000 of group insurance carried by each employee last payday of each monthl. PROTECT AUDIT TEST Net Paid $12.180.03 Time Worked Time Lost Time Clerk's Report No. 42 For the Week Ending October 24, 20- Time Record Employee IS M T W T F S Bonno, AV.... 8 8 8 8 8 Ford. C L... 8 8 8 8 8 Russell, V A. ... 8 8 8 8 6 Ryan, N. A ... 8 8 8 8 8 Student ....... 8 8 8 8 4 Williams, R. V... 8 8 8 7 8 40 hrs. 40 hrs. 38 hrs. 40 hrs. 36 hrs. 39 hrs. Time lost on account of family function; deduct 2 hours pay Time lost because of tardiness deduct I hour's pay. Payroll Accounting 2020 CHAPTER 7 P ropert Time Clark's Report No. 43 For the Week Ending October 31, 20.. Employee S M Time Record T W T F S Russell, VA Ryan. N. A. ... 8 8 8 8 8 B 8 8 8 8 8 8 8 8 8 8 8 8 4 8 8 8 PAY POINTS Make changes in November 6 pay. Refer to No 5.6 and 7. PROJECT AUDIT TEST Net Paid $ 1,494.06 No.9 Prepare the payroll for the first pay tried in November from Time Clerk's Report Nos. 42 and 43 and record the paychecks issued to all employees Record this payroll at the top of the second payroll register sheet. Note: Virginia Russell worked only 38 hours in the week ending Octo- ber 24. Therefore, compute her pay for that week by multiplying 38 by $15.00 her hourly ratel Rich Willy worked only 39 hours in the week ending October 24. Therefore, compute her pay for that week by multiplying 39 by $15.29 (her hourly rate). Also, record the employer's payroll taxes. November 13 No. 10 Because of her excessive fardiness and absenteeism during the year, the company discharged Rab Williams today. For the week ending Novem- ber 7, she was late a total of six hours and for this week, sbe missed two full days and was late two hours on another day. In lieu of two weeks' notice, Williams was given two full weeks' pay ($1,223.08). Along with her dismissal pay ($1,223.08), she was paid for the week ending Novem- ber 7 (34 hours, or $$19.86) and the days worked this current week (22 hours, or $336.38). The total pay for the two partial weeks is $856.24. Record a separate payroll register (on one line) to show Williams's total earnings, deductions, and net pay. The two weeks' dismissal pay is subject to all payroll taxes. Include dismissal pay with the total earnings but do not show the hours in the Time Record columns. Use the tax table for the biweekly payroll period for the total gross pay $2,079.321 of Williams. The deduction for group insurance premiums is $14.40. In the Time Record column, make a note of Williams's discharge as of this date. Indicate the payroll check number used to prepare the final check for Williams. When posting to the earnings record, make a notation of Wild liams's discharge on this date. Prepare the journal entries to transfer the net cash and to record Wil- liams's final pay and the employer's payroll taxes. Post to the ledger accounts. 3 Use the blank Form W-2 on page 7-59. Box "a" should be left blank, since Glo-Brite Paint Company does not use a control number to identify individual Forms W-2. PAY POINTS Prepare a Wage and Tax Statement Form W-2 to be given to Wliams Payroll Accounting 2010 LO4 outros doutna ction the a PAY POINTS On all tax and derosit forms requiring a signature use Joseph O'Neill name November 16 No. 1 Hlectronically deposit the FICA Fases and federal income for the October payrolls and complete the Federal Deposit Informa Worksheet page 749). Since the company is subject to the man posit rule, the deposit is due on the Sth of the following month. See deposit requirements explained on papes 1-17 11-19 November 15 Sunday: therefore, the deposit is to be made on the next business Prepare the journal entry to record the deposit of the taxes, and pont the appropriate ledger accounts No. 12 Since Glo-Brite Paint Company withholds the city of Philadelphia income tax, you must deposit the taxes with the Department of Roc The deposit rule that affects Glo-Brite Paint Company states that withheld taxes are between $150 and $16,000 per month, the company must deposit the tax monthly by the 15th of the following month withheld taxes for the October payrolls were $1,212.21. Prepare the journal entry to record the deposit of the taxes, and post to the appropriate ledger accounts. Complete the Philadelphia Emplover's Return of Tax Withheld cou pon Monthly Wage Tax), which appears on page 7.51. November 17 No. 13 Prepare an employee's carnings record for Beth Anne Woods, a new employee who began work today, Tuesday, Woods is single and claims one withholding allowance. She is employed as a programmer at a monthly salary of $2,600. Address, 8102 Franklin Court, Philadelphia, PA 19105- 0915. Telephone, 555-1128. Social Security No. 000-00-1587. She is eli- gible for group insurance coverage of $47,000 immediately, although her first deduction for group insurance will not be made until December 18. Department: Office Weekly rate: $600.00 Hourly rate: $15.00 November 18 No. 14 Deposit with the state of Pennsylvania the amount of state income taxes withheld from the November 6 and 13 (Ruth Williams) payrolls and complete the information worksheet. November 20 PROJECT AUDIT TEST Net Paid 59.425.15 No. 15 With this pay, the company has decided to offer employees a Savings Incentive Match Plan for Employees (SIMPLE Retirement Plan). Most of the employees opted to wait until the start of the following year to participate. However, the following employees have decided to take part in the plan for the remaining pay periods of the year. Lames Ferguson $500 contribution per pay period Dewey Mann: $250 contribution per pay period Joseph O Neilt $700 contribution per pay period Norman Ryan $200 contribution per pay period The contributions are to be deducted from the participating employee's pay and are excluded from the employee's income for federal income tax purposes. The other payroll taxes still apply. On the payroll registers and the earnings record, use the blank column under "Deductions for these contributions. Use the term "SIMPLE" as the new heading for this deduce tion column (on both the payroll register and employee's earnings record). Payroll Aeg 03 LHFIER 2015 Use the account in the general ledger for SIMPLE Contributions Payable account nu. 29. The company must match these contributions dollar for dallat, up to 3 percent of the employee's compensation. These payments will be pro cessed through the Arts Payable Department Prepare the payroll for the last pay period of November from Time Clerk's Rear Nos, 44 and 45, and record the paychecks issued to all employees. Al record the employer's payroll taxes. Time Clark's Report No 44 For the Week Ending November 7. 20- PAY POINTS Remember to the premiums on the group Employee 5 M Time Red T W T F S Zhr Ford. C. L. Russell, VA Ryan NA Student RV "Time of personal business Times of radi alects par Time Clark's Report No 45 For the Week Ending November 14, 20 Employees Time Record T W T Time Worked S M F S Fund.CL Russell, VA Ryan, N. A..... 8 8 8 8 40 hrs 40 hrs. 16hrs 22 hrs. W RV D D 8 6 8 "Time low hea of andineweler y e ne delust 1 hour PAY POINTS No. 16 Salary increases of $30 per week, effective for the two weeks covered in the December 4 payroll, are given to Catherine L Ford and Virginia A. Russell. The group insurance coverage for Ford will be increased to $50,000; for Russell, it will be increased to $49,000. Update the employ ces' earnings records accordingly. The new wage rates are listed below. The new wage rates are efective for the December 4 padi Hourly Rate Employee Ford, Catherine Weekly Rate 5640.00 63000 $1600 15.15 7-16 CHAPTERT Tool Polect Payroll Accounting 2020 November 30 No. 1 Prepare an employee's marines l o ident's nephew, who he can work toda Younis single and in withholding allowance. He is training as a field sales repres 3 0 the city where the home office is leated His beginning a 1 07 per month. Address, 7016 Holmes Drive, Philadelphia, PA 1 Telephone, 555.2096, Social Security No 000.00-6057. Young is en for croup insurance coverage of 549.000 Department Sales Weekly rate 5630.00 Hourly rate: 15.75 December 3 No. 18 Deposit with the state of Pennsylvania the amount of state income taxe withheld from the November 20 roll usine General Ledger balance for Account No. 25 and complete the information worksheet. DECT AUDIT TEST December 4 No. 19 Prepare the payroll for the first biweekly pay period of December from Time Clerk Report Nos. 46 and 47, and record the paychecks issued to all employees. Record this payroll ar rhe top of the third payroll register sheet. Note: Thursday, November 26, is a paid holiday for all workers. Also, record the employer's payroll taxes. Paid S10970.92 Time Test Time Clerk's Report No. 46 For the Week Ending November 21, 20. Time Record Time Employee S M T W T F S Bonno, A.V.... 8 8 8 8 8 40 hrs. Ford, C. L. ..... 8 8 8 8 8 40 hrs. Russell, VA 8 8 8 8 8 40 hrs. Ryan, N. A... 8 8 8 4 8 36 hrs. Srudent........ 8 8 8 4 8 36 hrs. Woods, BA 8 8 8 8 32 hrs. 4 hrs. "Time out on account of personal busines; deduct 4 hours' pay. Time Lost Time Clerk's Report No. 47 For the Week Ending November 28, 20- Time Record Time Employee S M T W T F S Worked Bonno, A. V. .... 8 8 8 8 8 48 hrs. Ford, C. L. ..... 8 8 8 e 8 40 hrs. Russell, V A..... 8 8 8 8 40 hrs. Ryan, N. A...... 9 10 8 8 43 hrs. Scudent......... 8 8 8 e 4 36 hrs. Woods, B. A..... 8 8 8 8 40 hrs. "Double time. Payroll Accounting 2020 CHAPTER 7-17 PAY POINTS This final pays not subject to withholding for FIT, SIT, CIT purposes No, 20 Anthony V. Homo reports the birth of a son and completes an amended Form W.4, showing his total withholding allowances to be five. Change his earnings record accordingly, effective with the December 18 y. No. 21 Boch Amboy Hanno and Norway have been notified that their union dues will increase to 59 per pay, starting with the last pay period of the year. Reflect these increases in the December 18 pory and show the changes on their earnings records. December 9 No. 22 Pay the treasurer of the union the amount of union dues withheld during the month of November December 11 No. 23 The Payroll Department was informed that Virgin A. Russell died in an automobile accident on her way home from work Thursday, December 10. December 14 No. 24 Make a separate entry on one line in the payroll register to record the issuance of a check payable to the Estate of Virginia A. Russell. This check covers Russell's work for the weeks ending December 5 and 12 ($1,134.00) plus her accrued vasation pay $1.260.00. Do not show the vacation hours in the Time Record columns on the payroll register, but include them in the Total Earnings column. Russell's final biweekly pay for time worked and the vacation pay are subject to FICA, FUTA, and SUTA employer and employee) taxes. Since Russell's cumulative earnings have surpassed the taxable earnings figures established by FUTA and SUTA, there will not be any unemployment tax on the employer. The deduction for group insurance premiums is $14.70. 2 Make a notation of Russell's death in the payroll register and on her earnings record Prepare journal entries to transfer the net pay and to record Russell's final pay and the employer's payroll taxes. Post to the ledger accounts. Include the final gross pay ($2,394.00) in Boxes 3 and 5, but not in Boxes 1, 16, and 18. Use the blank Form W-2 on page 7-59. In addition, the last wage payment and vacation pay must be reported on Form 1099-MISC. A Form 1096 must also be completed. These forms will be completed in February before their due date. (See Transaction Nos. 41 and 42 on page 7-66.) PROJECT AUDIT TEST Net Paid $2.194.72 PAY POINTS Prepare a Wage and Tax Statement, Form W-2 which will be given to the executor of the estate along with the final paycheck December 15 No. 25 Electronically deposit the amount of FICA taxes and federal income taxes for the November payrolls and complete the Federal Deposit Infor- mation Worksheet. No, 26 Deposit with the city of Philadelphia the amount of city income taxes withheld from the November payrolls. December 18 No. 27 Deposit with the state of Pennsylvania the amount of state income taxes withheld from the December 4 payroll and complete the information worksheet. ene Payroll Accounting 2020 7-18 CHAPTER 7. Patoll Payroll Accou insurance company that there will be mber on the policy for Virginia No. 28 Glo-Brite has been notified by the insurance company no premium chance for the month of December on the pole Kassell. Prepare the entry for the check made payable to the Virginia A Russell for the amount that was withheld for ins was withheld for insurance from her December 14 pay. hings record for Richard Lloyd Zimmerman, ance. Zimmerman is eligible PROJECT AUDIT TEST Net Paid $52.905.17 No. 29 Prepare an emplove's earnings record for Richard Lloyd cant by the who was employed today as time clerk t ake the place left vacant by death of Virginia A Russell last week. His beginning salary 15 salary is $2,600 per month. Address, 900 South Clark Street Philadelphia, PA 19195-62 Telephone, 555-2104. Social Security No. 000-00-1502. Zimmerm married and claims one withholding allowance Zimmerman of group insurance coverage of $47.000. although no deduction on group insurance premiums will be made until the last payday in Jan Department: Office Weekly rate: $600.00 Hourly rate: $15.00 No. 30 Prepare the payroll for the latter pay of December from Time Report Nos, 48 and 49 and record the paychecks issued to all employees Also, record the employer's payroll taxes. Effective with this pay, O'Neill completed a new Form W-4, changing his total withholding allowances to four. Previously, he had claimed tewer allowances than he had been using on his tax return. Change his carn- ings record accordingly. In this pay, the president of the company, Joseph O'Neill, is paid his annual bonus. This does not affect O'Neill's insurance coverage, which is based on regular pay. This year, his bonus is $85,000. For withholding purposes, the bonus is considered a supplemental payment and is added to his gross pay, and the aggregate amount is taxed. For this pay, O'Neill has increased his SIMPLE deduction to $4,000. To determine the federal income tax, use the Table of Allowance Values along with Tax Table A pages T-2 to T-4). In calculating the tax, do not round the aggregate to the nearest earnings dollar. In this pay, O'Neill has reached the OASDI ceiling. To calculate O'Neill's OASDI tax, multiply the OASDI ceiling of $132.900 by 6.2 percent and then subtract the year-to-date OASDI taxes withheld up to this pay. (Use O'Neill's Employee Earnings Record to view his year-to-date OASDI tax withheld). PAY POINTS Remember to deduct the premiums on the group insurance for each employee. Mote: After posting the information for this last pay to the employees' earings records, calculate and enter the quarterly and yearly totals on each earnings record. Time Clerk's Report No. 48 For the Week Ending December 5, 20- Time Record Time Is M T W T F S Worked Time Lost Employee Bonno, A. V. ... 14 8 8 8 8 Ford, C.L...... 8 8 8 8 Russell, V. A. ... 8 8 8 8 Ryan, N. A..... 8 9 9 9 Student ........ 8 8 7 8 Woods, B. A. ... 8 8 8 8 Young, P. W. ... 8 8 8 8 "Time lost because of tardiness: deduct 1 hour's pay. 8 8 8 9 4 8 8 44 hrs. 40 hrs. 40 hrs. 44 hrs. 35 hrs. 40 hrs. 40 hrs. 1 hr. Payroll Accounting 2020 CHAPTER 7. Payroll Project 7-19 Time Lost Time Clerk's Report No. 49 For the Week Ending December 12, 20-- Time Record Time Employee IS M T W T F S Worked Bonno, A. V. ... 8 8 8 8 8 8 48 hrs. Ford, C. L. ..... 4 8 8 8 8 36 hrs. Russell, V. A. ... 8 8 8 8 D 32 hrs. Ryan, N. A. .... 10 8 8 9 8 43 hrs. Student...... 4 8 8 8 4 32 hrs. Woods, B. A. ... 8 8 8 8 8 40 hrs. Young, P. W. ... 8 8 8 8 8 40 hrs. "Time spent in training session; no deduction in pay, **Time lost in dentist appointment; no deduction in pay. 4 hrs. 8 hrs. 4 hrs. Note: This completes the project insofar as recording the payroll transac- tions for the last quarter is concerned. The following additional transactions are given to illustrate different types of transactions arising in connection with the accounting for payrolls and payroll taxes. Record these transactions in the jour- nal, but do not post to the ledger. PROJECT AUDIT TES End-of-Year Activities January 6 No. 31 Deposit with the state of Pennsylvania the amount of state income taxes