Ellipses Corp. is a small business that operates in Herndon, VA. The company is located at 10 Period Lane, Herndon, VA 20170. Its federal identification number is 77-7777777, its state identification number is 12-345678999F-012, its state unemployment number is 1234567890, 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. Within QuickBooks the industry associated with the company is General Service-based Business and the business type is Corporation. Ellipses Corp. is on a weekly payroll schedule. During 2019 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 777-77-7777 4 3 Married Herndon, VA 20170 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 2 2 Married Note that Pierre Sternberg was hired in November, and his first day of work was Monday, November 18, 2019. Additionally, due to an economic downturn, Allison Harrison was laid off in mid-December, with her last day of work on Friday, December 20. All employees of Ellipses Corp. work a regular 40-hour workweek (thus all hours worked over 40 in a given week are overtime hours), receive overtime pay at a rate of 1.5 times the regular wage rate, and are paid weekly on Monday for the previous week (which runs from Saturday through Friday, although employees never work on weekends). The SUTA tax rate applicable to Ellipses Corp. is 2.53%, while the SUTA wage base in Virginia is $8,000. Note that QuickBooks defaults to a Social Security wage base of $128,400 in the Ellipses Corp. company file. Although this amount differs from the 2019 wage base, please utilize this amount when completing the payroll cycle. Name Regular Wage Rate Annual Salary Earnings and voluntary deduction information for each of the four employees is as follows: Weekly 401(k) Deduction Weekly Charitable Contribution Hunter Cranston $18/hour N/A 6% of gross pay $5 Allison Harrison $24/hour N/A 5% of gross pay $5 John Parker N/A $205,400 N/A $25 Pierre Sternberg N/A $111,800 10% of gross pay N/A The first 11 months of the year have passed, and all payroll-related activity has been properly accounted for as of 11/30/2019. Note that retirement deductions are made in association with the Williams Insurance Agency. 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 Federal State Social Medicare 401(k) Period Earnings Income Tax Income Tax Security Tax Tax Deduction Charitable Cont. 1st quarter $9,360 $455 $439.92 $580.32 $135.72 $561.60 $65 2nd quarter $9,360 $455 $439.92 $580.32 $135.72 $561.60 $65 3rd quarter $9,360 $455 $439.92 $580.32 $135.72 $561.60 $65 October $3,600 $175 $169.20 $223.20 $52.20 $216 $25 November $3,123 $128 $146.78 $193.63 $45.28 $187.38 $20 Allison Harrison Gross Federal State Social Medicare 401(k) Charitable Period Earnings Income Tax Income Tax Security Tax Tax Deduction Cont. 1st quarter $12,480 $624 $592.80 $773.76 $180.96 $624 $65 2nd quarter $12,480 $624 $592.80 $773.76 $180.96 $624 $65 3rd quarter $12,480 $624 $592.80 $773.76 $180.96 $624 $65 October $4,800 $240 $228 $297.60 $69.60 $240 $25 November $4,164 $163 $197.79 $258.17 $60.38 $208.20 $20 John Parker Gross Federal State Social Medicare 401(k) Charitable Period Earnings Income Tax Income Tax Security Tax Tax Deduction I Cont. 1st quarter $51,350 $12,308.57 $2,567.50 $3,183.70 $744.58 $0 $325 2nd quarter $51,350 $12,308.57 $2,567.50 $3,183.70 $744.58 $0 $325 3rd quarter $51,350 $12,308.57 $2,567.50 $1,593.40 $744.58 $0 $325 October $19,750 $4,734.24 $987.50 $0 $286.38 SO $125 November $15,800 $3,787.24 $790 SO $229.10 $0 $100 Pierre Sternberg Gross Federal State Social Medicare 401(k) Charitable Period Earnings Income Tax Income Tax Security Tax Tax Deduction Cont. 1st quarter $0 $0 $0 SO $0 SO 2nd quarter $0 $0 $0 $0 $0 $0 3rd quarter 50 $0 $0 SO $0 SO $0 October SO $0 SO 50 $0 $0 SO November $2,150 $185.53 $96.75 $133.30 $31.18 $215 SO Note that all tax payments and filings are made on the due date and that the company is a monthly depositor. Use Password1 as the password for the QuickBooks company file. Based on the data provided here, you will complete the following: 1. Within QuickBooks, process payroll for December for each of the four employees. When calculating federal income tax withholding, use the withholding tables where possible and refer to the percentage method only when necessary. Additionally, for simplicity, calculate the state income tax withholding as 5% of each employee's taxable pay (which is the same as taxable pay for FWT). Recall that state income tax withholding would ordinarily be calculated using the applicable state's withholding tables. Calculate and enter the Social Security and Medicare taxes, paying attention to the cumulative pay. Employees may be subject to Additional Medicare Tax, so watch cumulative pay and calculate when applicable. This is necessary because you do not have a purchased payroll subscription. Note that all charitable contributions are remitted to the organizations on the final day of each month. Note that as of December 7, Hunter Cranston requests that his federal withholding allowances increase from two to three. (Ellipses Corp. makes this change.) Payroll checks are remitted to 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 dates for the first pay period you enter may need to be changed. This bank account has been established within QuickBooks to reflect a balance of $500,000 as of January 1, 2019. The first payroll check written in December is check #735. I The following information will be required for the processing of payroll for the two employees who are compensated with an hourly wage: Weekly Hours Worked Weekly Start Date Hunter Cranston Allison Harrison November 30 40 41 December 7 39 37 December 14 38 36 December 21 24 0 WARNING! The above dates are weekly start dates. Refer to a calendar to determine the weekly end dates and associated pay dates. Dates in QuickBooks may not be correct for the first pay period you are entering Check them and make changes accordingly. Keep in mind that tax liability and payment amounts are determined based on the weekly pay dates. I 2. Within QuickBooks, create a Payroll Report that summarizes December payroll data (in the same manner that a payroll register summarizes such data). Export the report to Microsoft Excel. 3. Within QuickBooks, create a Payroll Report that summarizes 4th quarter (October-December) payroll data. Export the report to Microsoft Excel. Then complete Form 941 for the 4th quarter. Note that based on the lookback period, the company is a monthly depositor that made timely payments throughout the entire year. Although Virginia quarterly state payroll forms are also filed by Ellipses Corp., you will not complete these. 4. Within QuickBooks, create a Payroll Report that summarizes payroll data for the entire year. Export the report to Microsoft Excel. Then complete Form 940 for Ellipses Corp. Note that 401(k) deductions are taxable for FUTA and that FUTA payments are made only when required (i.e., 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). 5. 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 and provide it to your instructor via a Microsoft Excel file. 6. Based on the QuickBooks reports previously generated, 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. was given at the beginning of the project. 7. Based on the QuickBooks reports previously generated, 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.