COMPANY BACKGROUND: ABC Company is a new service-type start-up as a sole proprietorship in Bremerton, Washington, and will operate around a Monday through Friday workweek. The company has hired six employees that will be paid weekly, where they would receive a paycheck on Monday for the preceding Monday through Friday workweek (see below payroll calendar). You are to compute the payroll for the ABC Companys first month of start-up, May 2010. Hourly employees would earn overtime at a rate of time-and-a-half for any time worked over 40 hours per week, and salaried employees would not earn overtime.

PAYROLL DETAILS: The following employees work for this company. Standard employee deductionsinclude federal employee taxes: FIT-Federal Income Tax using wage-bracket tables, and FICA, aka SocialSecurity using 6.2% using maximum earnings of $106,800 and for Medicare using 1.45% on unlimitedearnings. Other deductions include optional Group Insurance contributions at a flat rate per pay periodof $100 for family rate or $50 for single status, where the company will contribute a matching premiumeach pay period, and other voluntary deductions as indicated below:

Employee Name Marital Status No. of W/H Allow. Salary Rate Group Ins. Other Deductions

Boothe, Richard Single 1 $11/hr NO NONE

Camisole, Anthony Married 4 $5,000/mo YES $100 IRA;$50 Savings Bonds

George, Melinda Married 3 $3,500/mo YES $50 IRA; $25 Savings Bonds

Lawrence, Sharon Married 5 $2,800/mo. YES $50 IRA

Mathews, Harold Single 1 $12/hr YES NONE

Wilson, Samuel Married 2 $15/hr YES $50 IRA

PAYROLL PERIOD CALENDAR

& TIME WORKED: 5/10 (5/3-7) 5/17(5/10-14) 5/24(5/17-21) 5/31(5/24-28)

Boothe, Richard 42 43 43 44

Camisole, Anthony 50 55 52 50

George, Melinda 45 48 46 45

Lawrence, Sharon 40 40 40 40

Mathews, Harold 42 44 42 43

Wilson, Samuel 43 44 42 44

PARTIAL GENERAL LEDGER:

Assets:

101 Cash ($50,000 beginning balance as of 5/1/10)

110 Accounts Receivable

Liabilities:

201 Accounts Payable

221 Employee Federal Income Taxes Payable

223 Social Security Taxes Payable

225 Medicare Taxes Payable

230 IRA Savings Payable

231 Savings Bonds Payable

234 Federal Unemployment Taxes Payable

235 State Unemployment Taxes Payable

236 Medical/Dental Group Insurance Premiums Payable

240 Salaries and Wages Payable

Owners Equity:

301 Owner, Capital ($50,000 beginning balance as of 5/1/10)

305 Owner, Drawing

Expenses:

500 Salaries and Wages Expense

501 Payroll & Taxes Expense

505 Medical/Dental Group Insurance Expense

AUTOMATING PAYROLL WITH MS EXCEL: Complete all four pay periods for the time worked information as provided. This includes the followingtasks:

1. Complete a payroll register

2. Journalize payroll entries and post to a partial general ledger using the partial Chart of Accountsprovided

3. Record to employee earnings records

It is recommended that you use Microsoft Excel to automate the payroll project (a generic Exceltemplate is provided, which can be altered by the student); however, documents are provided to allow for manual completion.

FICA: Soc Sec 6.2% and Medicare 1.45%

UNEMPLOYMENT: SUTA 5.4% AND FUTA 0.8%