Appendix A Continuing Payroll Project: Wayland Custom Woodworking (3 Months, Part 1)

[The following information applies to the questions displayed below.]

Wayland Custom Woodworking is a firm that manufactures custom cabinets and woodwork for business and residential customers. Students will have the opportunity to establish payroll records and to complete month of payroll information for Wayland.Wayland Custom Woodworking is located at 1716 Nichol Street, Logan, Utah, 84321, phone number 435-555-9877. The owner is Mark Wayland. Wayland's EIN is 91-7444533, and the Utah Employer Account Number is 999-9290-1. Wayland has determined it will pay their employees on a semimonthly basis. Federal income tax should be computed using thepercentagemethod.

For Part 1 of this project, you will complete payroll for the entire fourth quarter (Q4) of 2018, which consists of the final six pay periods of the year. Once payroll has been completed for the fourth quarter, you will then file the annual tax forms for Wayland as well as prepare each employee's Form W-2 in Part 2.

The SUTA (UI) rate for Wayland Custom Woodworking is 2.6 percenton the first $34,300. The state withholding rate is 4.95 percentfor all income levels and marital statuses, a table has been included to assist with calculations.

Rounding can a challenge. For this project, the hourly rate for the individuals should be rounded to five decimal places. So take their salary and divide by 2,080 (52 weeks at 40 hours per week) for full-time, nonexempt employees. For nonexempt employees, such as Stevon Varden, Varden's salary is $42,000 and is a nonexempt employee, so the calculation will be $42,000/2,080, which would give you$20.19231per hour, and use this to compute the employee's gross pay based on the number of hours worked. When a nonexempt employee has worked overtime hours for a given pay period, take their regular hourly rate and multiply it by 1.5, round the result to 5 decimal places, and multiply the new rate by their number of overtime hours.

For exempt employees', such as Anthony Chinson, an hourly rate rounded to five decimal places should be determined using the same method shown above, but gross pay should be determined by taking the exempt employee's yearly salary and dividing it by 24, which is the number of payroll periods with a semimonthly frequency. For example, Chinson's salary is $24,000 and is a full time employee. Chinson's hourly rate is$11.53846(determined by taking $24,000/2,080), but as he is an exempt employee, the calculation for his gross pay will be $24,000/24, which would give you$1,000. For pay periods that include paid holidays, ensure to distribute an exempt employee's regular pay accordingly to holiday pay based on the number of hours that consist of the holidays for that period.

After the gross pay has been calculated, round the result to only two decimal points prior to calculating taxes or other withholdings.

Employees are paid for the following holidays occurring during the final quarter:

• Thanksgiving day and the day after, Thursday and Friday November 22-23.
• Christmas, which is a Tuesday. Employees receive holiday pay forMonday, December 24, and Tuesday, December 25.

For the completion of this project, refer to the tax-related information in the table below. For federal withholding calculations, use the percentage method tables inAppendix C, which is provided below. For Utah state withholding calculations, use the Utah Schedule 3 tax tables linked below (ensure to use the appropriate Utah table based on each employee's marital status). Both 401(k) and insurance are pretax for federal income tax and Utah income tax.

Federal Withholding Allowance (less 401(k), Section 125)$172.90 per allowance claimedFederal Unemployment Rate (employer only) (less Section 125)0.6% on the first $7,000 of wagesSemimonthly Federal Percentage Method Tax TableAppendix CPage 393 Table #3State Unemployment Rate (employer only) (less Section 125)2.6% on the first $34,300 of wagesState Withholding Rate (less 401(k), Section 125)See UtahSchedule 3, Table 1or use theExcel Version of Schedule 3

October 1:

Wayland Custom Woodworking (WCW) pays its employees according to their job classification. The following employees comprise Wayland's staff:

Employee NumberName and AddressPayroll information00-ChinsAnthony ChinsonMarried, 1 Withholding allowance530 Sylvann AvenueExemptLogan, UT 84321$24,000/year + commission435-555-1212Start Date: 10/1/2018Job title: Account ExecutiveSSN: 511-22-333300-WaylaMark WaylandMarried, 5 withholding allowances1570 Lovett StreetExemptLogan, UT 84321$75,000/year435-555-1110Start Date: 10/1/2018Job title: President/OwnerSSN: 505-33-177501-PeppiSylvia PeppinicoMarried, 7 withholding allowances291 Antioch RoadExemptLogan, UT 84321$43,500/year435-555-2244Start Date: 10/1/2018Job title: CraftsmanSSN: 047-55-995101-VardeStevon VardenMarried, 2 withholding allowances333 Justin DriveNonexemptLogan, UT 84321$42,000/year435-555-9981Start Date: 10/1/2018Job title: CraftsmanSSN: 022-66-113102-HissoLeonard HissopSingle, 4 withholding allowances531 5th StreetNonexemptLogan, UT 84321$49,500/year435-555-5858Start Date: 10/1/2018Job title: Purchasing/ShippingSSN: 311-22-669800-SucceStudent SuccessSingle, 1 withholding allowance1650 South StreetNonexemptLogan, UT 84321$36,000/year435-556-1211Start Date: 10/1/2018Job title: Accounting ClerkSSN: 555-55-5555

The departments are as follows:

Department 00: Sales and Administration

Department 01: Factory workers

Department 02: Delivery and Customer service

You have been hired as of October 1 as the new accounting clerk. Your employee number is 00-SUCCE. Your name is Student Success. Your address is 1650 South Street, Logan, UT 84321. Your phone number is 435-556-1211, you were born July 16, 1985, your Utah driver's license number is 887743 expiring in 7/16/2019, and your Social Security number is 555-55-5555. You are considered a nonexempt employee, have one withholding allowance, and paida rate of $36,000 per year.

The balance sheet for WCW as of September 30, 2018, is as follows:

Wayland Custom Woodworking

Balance Sheet

September 30, 2018AssetsLiabilities & EquityCash$1,125,000.00Accounts Payable$112,490.00Supplies27,240.00Salaries and Wages PayableOffice Equipment87,250.00Federal Unemployment Tax PayableInventory123,000.00Social Security Tax PayableVehicle25,000.00Medicare Tax PayableAccumulated Depreciation, VehicleState Unemployment Tax PayableBuilding164,000.00Employee Federal Income Tax PayableAccumulated Depreciation, BuildingEmployee State Income Tax PayableLand35,750.00401(k) Contributions PayableTotal Assets1,587,240.00Employee Medical Premiums PayableNotes Payable224,750.00Utilities PayableTotal Liabilities337,240.00Owners' Equity1,250,000.00Retained Earnings-Total Equity1,250,000.00Total Liabilities and Equity1,587,240.00

Voluntary deductions for each employee are as follows:

NameDeductionChinsonInsurance: $50/paycheck401(k): 3% of gross payWaylandInsurance: $75/paycheck401(k): 6% of gross payPeppinicoInsurance: $75/paycheck401(k): $50 per paycheckVardenInsurance: $50/paycheck401(k): 4% of gross payHissopInsurance: $75/paycheck401(k): 3% of gross payStudentInsurance: $50/paycheck401(k): 3% of gross pay

For additional instructions on how to navigate and work throughthrough Part 1 of this project, pleasedownload the student project guidehere.

Pay Periods 10/15 to 12/31 (6 periods)

Required:

2.Complete the payroll process for Wayland Custom Woodworking's fourth quarter pay periods. Please note that for pay periods after October 15, youmustcarry the current ending year to date (YTD) amounts as they appear from the prior pay period from each employee's Employee Earnings Records form (EERF) to the rows titled "Prior Period YTD". Amounts from the current pay period will be auto-populated to the employee EERFs once you complete the payroll register, and will be combined with the prior period YTD amounts to determine the new current ending YTD amounts.

For example, if the year to date gross pay for Anthony Chinson is $5,000 after the October 31 pay period, you would take this amount and add it to the appropriate input box for gross pay on the "Prior Period YTD" row for their November 15 EERF.

Additionally, you must carry the ending balance from each account in the prior period General Ledger to the following period's General Ledger to the input boxes titled "Ending account balance from the prior period" before posting the payroll journal entries from the current period to the Ledger.

For additional instructions on how to carry information from one pay period to another, along with a guided walkthrough example of this process, refer to the project user guide in the project information section above.

October 15

October 15 is the end of the first pay period for the month of October. Employee pay will be disbursed on October 20, 2018. Any time worked in excess of 88 hours during this pay period is considered overtime for nonexempt employees. Remember that the employees are paid on a semimonthly basis.

• Complete the Employee Gross Pay tab.
• Complete the Payroll Register for October 15.
• Refer to the Employee Earnings Record Forms for each employee for the current YTD amounts after you have completed the October 15 Payroll Register. Amounts from the current period are auto-populated from the Payroll Register.
• Complete the General Journal entries for the October 15 payroll.
• Post the journal entries to the General Ledger.

Compute the pay for each employee. Update the Employee Earnings record for the period's pay and the new YTD amount. Employee pay will be disbursed on November 21, 2018. Any hours exceeding 88 during this pay period are considered overtime for nonexempt employees. Remember that the employees are paid semimonthly.

• Complete the Employee Gross Pay tab.
• Complete the Payroll Register for November 15.
• You must update the Employee Earnings Record Forms for each employee with the ending YTD amounts from October 31 (the prior pay period) in the "Prior Period YTD" rows. Amounts from the current period are auto-populated from the Payroll Register on the row for November 15.
• Complete the General Journal entries for the November 15 payroll.
• Update the General Ledger with the ending ledger balances from the October 31 pay period ledger accounts first, and then post the journal entries from the current period to the General Ledger.

Employee Payroll Chinson Wayland Peppinico Success General General Grosspay Register EERF EERF EERF Varden EERF Hissop EERF EERF Journal Ledger Compute the gross earnings for regular, overtime, and holiday pay for each employee for the November 30 pay period. Remember that while an hourly rate is shown for all employees, the period pay for exempt employees should be calculated by taking their yearly salary and dividing it by the number of semimonthly pay periods in a year, which should then be split between the number of hours considered regular time and holiday time. The pay rates for each employee have been given from the prior period. (Round your answers to 2 decimals.) Last Name Hourly Rate (Rounded to 5 Decimals) Pay Period Hours 11/16-11/30 Regular Overtime Holiday Commission Chinson $ 11.53846 88 hours (exempt - 16 hours Holiday) $ 1,000.00 $ 0.00 S 400.00 $ 2,325.00 Wayland S 36.05769 88 hours (exempt - 16 hours Holiday) 0.00 $ 576.92 Peppinico 20.91346 88 hours (exempt - 16 hours Holiday) 0.00 334.62 Varden S 20.19231 90 hours (exempt - 16 hours Holiday) $ 1,292.31 302.88 323.07 Hissop S 23.79808 91 hours (exempt - 16 hours Holiday) 392.67 380.77 Success $ 17.30769 89 hours (exempt - 16 hours Holiday) $ 1,107.69 $ 233.65 $ 276.92 Required information Run Date 11/30/2018 Company Name: Wayland Custom Woodworking P/R Date 12/5/2018 Name M/S # of No of Taxable Taxable W/H Hourly Rate No of Regular Overtime No of Holiday Commissions Gross Hours Hours Earnings 401(k) Insurance Wages for Wages for Hours Federal W/H FICA Anthony Chinson M 1 $ 0.00 $ 0. Mark Wayland M 0.00 0 . Sylvia Peppinico M 7 0.00 0. Stevon Varden M 2 0.00 0. Leonard Hissop S 0.00 Student F Success S 0.00 Totals $ 0.00 $ 0.00 $ 0.00 $ 0.00 $ Taxable Taxable Name Gross Federal W/H Social Earning Wages for Wages for Medicare State W/H Net Pay Check No. Federal W/H FICA Security Tax W/H Tax Anthony Chinson $ 0.00 $ 0.00 174574 Mark Wayland 0.00 0.00 174575 Sylvia Peppinico 0.00 0.00 174576 Stevon Varden 0.00 0.00 174577 Leonard Hissop 0.00 0.00 174578 Student F Success 0.00 0.00 174579 Totals $ 0.00 $ 0.00 $ 0.00 $ 0.00 $ 0.00 $ 0.00 $ 0.00 $ 0.00Required information Run Date 11/15/2018 Company Name: Wayland Custom Woodworking P/R Date 11/21/2018 Taxable Name M/S # of Hourly Rate No of Regular No of Overtime Gross Taxable Hours No of Holiday Commissions Hours Earnings 401(k) Insurance Wages for Wages for W/H Hours Federal W/H FICA Anthony Chinson M 1 0.00 $ 0. Mark Wayland M 0.00 0. Sylvia Peppinico M 7 0.00 0. Stevon Varden M 2 0.00 0. Leonard Hissop CO 0.00 0 . Student F Success S 0.00 0. Totals $ 0.00 $ 0.00 $ 0.00 $ 0.00 $ Gross Taxable Taxable Name Earning Wages for Wages for Federal W/H Social Medicare State W/H Security Tax W/H Tax Net Pay Check No. Federal W/H FICA Anthony Chinson $ 0.00 $ 0.00 174568 Mark Wayland 0.00 0.00 174569 Sylvia Peppinico 0.00 0.00 174570 Stevon Varden 0.00 D.OC 174571 Leonard Hissop 0.00 0.00 174572 Student F Success 0.00 0.00 174573 Totals $ 0.00 $ 0.00 $ 0.00 $ 0.00 $ 0.00 $ 0.00 $ 0.00 0.00