made on each plant we month, the amounts withheld during the preceding month ar period treasurer of the union. lit Test Distribution of Labor Costs s you Figure 7.5 shows how the salaries and wages are to be charged to the labor cost iod. accounts. EST Start of Payroll Project October 9, 20-- No. 1 The first payroll in October covered the two workweeks 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 President (O'Neill) Administrative Salaries Executive Secretary (Ford) Programmer (Williams) Time Clerk (Russell) Office Salaries Accounting Trainee (Student) Sales Manager (Ferguson) Sales Representative (Mann) Sales Salaries Workers (Bonno and Ryan) Supervisor (Sokowski) Plant WagesCHAPTER 7 . Payroll Project 7-15 Payroll Accounting 2020 Use the account in the general ledger for SIMPLE Contributions Payable-account no. 29. The company must match these contributions dollar for dollar, up to 3 percent of the employee's compensation. These payments will be pro- cessed through the Accounts Payable Department. Prepare the payroll for the last pay period of November from Time Clerk's Report Nos. 44 and 45, and record the paychecks issued to all employees. Also, record the employer's payroll taxes. Time Clerk's Report No. 44 PAY POINTS For the Week Ending November 7, 20-- Remember to deduct the Time Record Time Time premiums on the group Employee SMT W T F S Worked Lost insurance for each employee. Bonno, A. V. ... 8 8 8 8 40 hrs. Ford, C. L. .... 40 hrs. . . . Russell, V. A. ... 16 8 8 38 hrs. 2 hrs. Ryan, N. A. .. . . 8 8 8 40 hrs. . . . Student . . ...... 8 8 36 hrs. Williams, R. V. . . 6 8 7 . . . 34 hrs. 6 hrs.* * *Time lost for personal business; deduct 2 hours' pay. **Time lost because of tardiness; deduct 6 hours' pay. Time Clerk's Report No. 45 For the Week Ending November 14, 20-- Employee Time Record Time Time S M T WTF S Worked Lost Bonno, A. V. ... Ford, C. L. ..... Do : 24 hrs. 40 hrs. . . Russell, V. A. ... . . . 8 8 40 hrs. . . . Ryan, N. A. ... 8 40 hrs. Student . . . .... . 8 00 00 00 0O 36 hrs. Williams, R. V. .. 00 00 00 00 : 8 D D 8 6 22 hrs. 18 hrs.* *Time lost because of tardiness; deduct 2 hours' pay. Unexcused absences; deduct 16 hours' pay. 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 PAY POINTS $50,000; for Russell, it will be increased to $49,000. Update the employ- ees' earnings records accordingly. The new wage rates are listed below. The new wage rates are effective for the December 4 Employee payroll. Weekly Rate Ford, Catherine L. . Hourly Rate Russell, Virginia A. ... $640.00 $16.00 630.00 15.75Payroll Accounting 2020 7-16 CHAPTER 7 . Payroll Project November 30 No. 17 Prepare an employee's earnings record for Paul Winston Young, the pres- ident's nephew, who began work today. Young is single and claims one withholding allowance. He is training as a field sales representative in the city where the home office is located. His beginning salary is $2,730 per month. Address, 7936 Holmes Drive, Philadelphia, PA 19107-6107. Telephone, 555-2096. Social Security No. 000-00-6057. Young is eligible for group insurance coverage of $49,000. Department: Sales Weekly rate: $630.00 Hourly rate: $15.75 December 3 No. 18 Deposit with the state of Pennsylvania the amount of state income taxes withheld from the November 20 payroll using General Ledger balance for Account No. 25 and complete the information worksheet. December 4 No. 19 Prepare the payroll for the first biweekly pay period of December from JECT AUDIT TEST Time Clerk's Report Nos. 46 and 47, and record the paychecks issued to all employees. Record this payroll at the top of the third payroll register Paid $10,970.92 sheet. Note: Thursday, November 26, is a paid holiday for all workers. Also, record the employer's payroll taxes. Time Clerk's Report No. 46 For the Week Ending November 21, 20-- Employee Time Record Time Time S M T W T F S Worked Lost Bonno, A. V. ... 8 8 8 40 hrs. . . . Ford, C. L. ..... 8 40 hrs. Russell, V. A. . 8 40 hrs. Ryan, N. A. 4 36 hrs. + hrs.* Student . . .. . . . . 4 36 hrs. . . Woods, B. A. . . . 8 32 hrs. *Time lost on account of personal business; deduct 4 hours pay. Time Clerk's Report No. 47 For the Week Ending November 28, 20- Employee Time Record Time Time S MTWTF S Worked Lost Bonno, A. V. .... 3* 8 Ford, C. L. .. 8 48 hrs. 00 00 00 PAID HOLIDAY DO A 00 00 00 00 40 hrs. Russell, V. A. . . . . . 40 hrs. Ryan, N. A. ..... 9 10 43 hrs. Student. ... ..... 8 36 hrs. Woods, B. A. . ... 8 40 hrs. . . . *Double time.Payroll Accounting 2020 CHAPTER 7 . Payroll Project 7-17 No. 20 Anthony V. Bonno 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 pay. No. 21 Both Anthony Bonno and Norman Ryan have been notified that their union dues will increase to $9 per pay, starting with the last pay period of the year. Reflect these increases in the December 18 pay 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 PAY POINTS No. 23 The Payroll Department was informed that Virginia A. Russell died in an automobile accident on her way home from work Thursday, December 10. This final pay is not subject to withholding for FIT, SIT, or CIT December 14 purposes. No. 24 0 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 vacation pay ($1,260.00). Do not show the PROJECT AUDIT TEST vacation hours in the Time Record columns on the payroll register, but include them in the Total Earnings column. Net Paid $2, 194.72 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. 3 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. PAY POINTS 4 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. Prepare a Wage and Tax In addition, the last wage payment and vacation pay must be reported on Statement, Form W-2, which Form 1099-MISC. A Form 1096 must also be completed. These forms will be given to the executor of will be completed in February before their due date. (See Transaction the estate along with the final Nos. 41 and 42 on page 7-66.) 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.7-18 CHAPTER 7 . Payroll Project Payroll Accounting 2020 No. 28 Glo-Brite has been notified by the insurance company that there will be no premium charge for the month of December on the policy for Virginia Russell. Prepare the entry for the check made payable to the estate of Virginia A. Russell for the amount that was withheld for insurance from her December 14 pay. No. 29 Prepare an employee's earnings record for Richard Lloyd Zimmerman, who was employed today as time clerk to take the place left vacant by the death of Virginia A. Russell last week. His beginning salary is $2,600 per month. Address, 900 South Clark Street, Philadelphia, PA 19195-6247. Telephone, 555-2104. Social Security No. 000-00-1502. Zimmerman is married and claims one withholding allowance. Zimmerman is eligible for group insurance coverage of $47,000, although no deduction for group insurance premiums will be made until the last payday in January. Department: Office Weekly rate: $600.00 Hourly rate: $15.00 PROJECT AUDIT TEST No. 30 Prepare the payroll for the latter pay of December from Time Clerk's Net Paid $52,905.17 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 fewer allowances than he had been using on his tax return. Change his earn- ings record accordingly. PAY POINTS 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 Remember to deduct the is based on regular pay. This year, his bonus is $85,000. For withholding premiums on the group purposes, the bonus is considered a supplemental payment and is added insurance for each employee. 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). Note: After posting the information for this last pay to the employees' earnings 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-- Employee Time Record Time Time S M T W T F S Worked Lost Bonno, A. V. ... 4 8 8 8 44 hrs. Ford, C. L. ..... 8 8 8 40 hrs. Russell, V. A. ... 8 8 8 8 Ryan, N. A. . .... 9 9 9 9 40 hrs. 44 hrs. Student . ...... . 8 8 8 00 00 A 35 hrs. I hr.* Woods, B. A. 40 hrs. Young, P. W. ... 8 40 hrs. Time lost because of tardiness; deduct 1 hour's pay.Payroll Accounting 2020 CHAPTER 7 . Payroll Project 7-19 Time Clerk's Report No. 49 For the Week Ending December 12, 20-- Time Record Time Time Employee S MT WT F S Worked Lost Bonno, A. V. . 8 8 8 8 8 48 hrs. Ford, C. L. .... 4 8 36 hrs. 4 hrs. Russell, V. A. .. 8 8 D 32 hrs. 8 hrs. Ryan, N. A. . 10 8 43 hrs. Student . . . . 4 32 hrs. 4 hrs.* * Woods, B. A. .. 8 40 hrs. Young, P. W. 8 40 hrs. *Time spent in training session; no deduction in pay. **Time lost in dentist appointment; no deduction in pay. 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.Payroll Accounting 2020 CHAPTER 7 . Payroll Project 7-7 2. In completing the time record columns of the payroll register for all work- ers, you should place an 8 in the day column for each full day worked (refer to page PR-2 at the end of the book). If an employee works less than a full day, show the actual hours for which the employee will be paid. 3. In the case of an employee who begins work during a pay period, compute the earnings by paying the employees their weekly rate for any full week worked. For any partial week, compute the earnings for that week by mul- 4 . tiplying the hours worked by the hourly rate of pay. If time lost is to be deducted from a salaried employee's pay, the employ- ee's pay must be determined by multiplying the actual hours worked for that week by the hourly rate. If hours are missed but no pay is deducted, include those hours in the Time Record columns on the payroll register. The following schedule shows the weekly and hourly wage rates of the salaried employees: Employee Weekly Rate Hourly Rate Ferguson, James C. . $1, 125.00 $28.13 Ford, Catherine L. ..... 510.00 15.25 Mann, Dewey W. 675.00 16.88 O'Neill, Joseph T. ..... 2,307.69* 28.85 Russell, Virginia A. .. 600.00 15.00 Sokowski, Thomas J. 1,025.00 25.63 Williams, Ruth V. ...... ....... 611.54 15.29 *0'Neill is paid on a biweekly basis. 5. Plant workers (Bonno and Ryan), other than supervisors, are employed on an hourly basis. Compute the wages by multiplying the number of hours worked during the pay period by the employee's hourly rate. 6. The information needed and the sequence of steps that are completed for the payroll are presented in the following discussion. Time Clerk's Report No. 38 For the Week Ending September 26, 20-- Employee Time Record Time Time S M T WT F S Worked Lost Bonno, A. V. .... 8 8 8 40 hrs. Ford, C. L. . .... . 8 8 40 hrs. Russell, V. A. .. . . 8 8 40 hrs. Ryan, N. A. . .... 8 8 40 hrs. . Student . .... . . . 8 36 hrs. Williams, R. V. .. 8 8 8 32 hrs. 8 hrs.* *Time lost because of personal business; charged to personal leave; no deduction for this time lost. D = lost full dayPayroll Accounting 2020 7-8 CHAPTER 7 . Payroll Project Time Clerk's Report No. 39 For the Week Ending October 3, 20-- Time Record Time Time Employee S T W T F Worked Lost M S Bonno, A. V.. ... 8 8 8 8 8 40 hrs. Ford, C. L. .... . 8 40 hrs. . . . Russell, V. A. ... 8 8 40 hrs. . . Ryan, N. A.. .... 8 8 8 40 hrs. . . Student . . . . . . . . 8 8 36 hrs. . . . Williams, R. V.. . 8 8 40 hrs. . . . The time clerk prepared Time Clerk's Report Nos. 38 and 39 from the time cards used by the employees for these workweeks. In as much as the president, sales manager, sales representatives, and supervisors do not ring in and out on the time clock, their records are not included in the time clerks report, but their sal- aries must be included in the payroll. 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. Employee Hourly Rate Bonno, Anthony V. ...... $17.60 Ryan , Norman A. . 18.00 Student.. 14.00 PAY POINTS 2 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- Tax calculations are to be taken dent." The fold-out payroll register forms needed to complete this project are to three decimal places and bound at the back of the book (pages PR-2, PR-3, and PR-4). then rounded to two places. No deduction has been made for the time lost by Williams. Thus, the total num- ber of hours (80) 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). PAY POINTS In computing the federal income taxes to be withheld, the wage-bracket tables in Tax Table B at the back of the book were used (pages T-5 to T-14). Use tax tables for biweekly Each payday, $8 was deducted from the earnings of the two plant workers for payroll period. 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 reg- ister, each employee's gross earnings were recorded in the column that identifies the 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. 3 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 7 . Payroll Project 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, a column has been provided in the earnings record for recording each deduction for FICA (OASDI and HI), FIT, SIT, SUTA, 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 Premiums Collected and Union Dues Withheld. Thus, any question about the amounts withheld from an employ- ee'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. 5 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 Salaries 2,307.69 Office Salaries . 4,651.08 Sales Salaries 3,600.00 Plant Wages .... 4,898.00 FICA Taxes Payable-OASDI 958.33 FICA Taxes Payable- 224.14 Employees FIT Payable. 859.00 Employees SIT Payable.. 474.55 Employees SUTA Payable.. 9.25 Employees CIT Payable. 599.86 Union Dues Payable .... 16.00 Payroll Cash. 12,315.64 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) Student (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)IN 7-10 CHAPTER 7 . Payroll Project Payroll Accounting 2020 FICA Taxes Payable-OASDI and FICA Taxes Payable-HI were credited for $958.33 and $224.14, respectively, the amounts deducted from employees' wages. Employees FIT Payable, Employees SIT Payable, Employees SUTA Payable, Employees CIT Payable, and Union Dues Payable were credited for the total amount withheld for each kind of deduction from employees' wages. In subsequent payroll transactions, Group Insurance Premiums Collected will be credited for the amounts withheld from employees' wages for this type of deduction. Finally, Pay- roll Cash was credited for the sum of the net amounts paid all employees. 6 The payroll taxes for this pay were then recorded in the general journal (page 7-24) as follows: Payroll Taxes.... 1,381.61 FICA Taxes Payable-OASDI . 958.32 FICA Taxes Payable- -HI.. 224.12 FUTA Taxes Payable .. 22.91 UTA Taxes Payable-Employer. 176.26 Payroll Taxes was debited for the sum of the employer's FICA, FUTA, and SUTA taxes. The taxable earnings 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: FICA-OASDI: $ 958.32 FICA-HI: 6.2% of $15,456.77 = FUTA: 1.45% of $15,456.77 = 224.12 0.6% of $3,818.00 = 22.91 SUTA: 3.6890% of $4,778.00 = 176.26 Total Payroll Taxes ......... $ 1,381.61 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 $224.12, 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. D Prepare the journal entry to record the deposit of the taxes, and post to the appropriate ledger accounts. 2 Pennsylvania has eliminated the filing of paper forms (replaced by telefile or online filing). The information needed to telefile is listed onPayroll Accounting 2020 CHAPTER 7 . Payroll Project 7-11 page 7-50-complete the information worksheet needed for the first semimonthly period of October. The company's Pennsylvania employer account number is 000-0-3300, its EIN is 00-0000660, its filing pass- word is GBPCOM, and its telephone number is (215) 555-9559. October 23 No. 3 Prepare the payroll for the last pay period of October from Time Clerk's LO 1 Report Nos. 40 and 41. Prepare payroll registers. 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 PROJECT AUDIT TEST after the October 9 payroll, insert "Payday October 23-For Period Ending October 17, 20--." On the following lines, record the payroll Net Paid $12,376.89 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 PAY POINTS paid twice the regular hourly rate for work on Sundays or holidays. With this pay period, the cumulative earnings of several employees Even though they are not exceed the taxable income base set up by FUTA and SUTA. This factor on the time clerk's report, must be considered in preparing the payroll register and in computing remember to pay the the employer's payroll taxes. Refer to each employee's earnings record to president, sales manager, sales representatives, and see the amount of cumulative earnings. supervisors. Time Clerk's Report No. 40 For the Week Ending October 10, 20-- Time Record Time Time LO 2 Employee SMT T F S Worked Lost Maintain employees' earnings records. Bonno, A. V. .... 18 8 8 8 Ford, C. L. ...... 8 8 8 8 Russell, V. A. 8 8 8 0 00 4 44 hrs. 36 hrs. 4 hrs.* 40 hrs. . . . Ryan, N. A. ..... 8 8 40 hrs. . . . Student . ........ 8 8 36 hrs. . . . Williams, R. V. ... 8 8 8 40 hrs. *Time lost on account of death of relative; charged against annual personal leave; no deduction for time lost. Time Clerk's Report No. 41 For the Week Ending October 17, 20-- Employee Time Record Time Time SMT W T F S Worked Lost Bonno, A. V. ... 8 40 hrs. . . . Ford, C. L. ..... 40 hrs. . . . Russell, V. A. ... 8 Ryan, N. A. .... Student . .... . . . 10 00 00 00 00 DA OO OO OO OO 40 hrs. . . 8 18 hrs. . . . 36 hrs. . . . Williams, R. V. .. 8 8 40 hrs. . . .CHAPTER 7 . Payroll Project Payroll Accounting 2020 2 Make the entry transferring from Cash to Payroll Cash the net amount LO 3 of the total payroll, and post. and post payroll and 3 Post the required information from the payroll register to each entries. employee's earnings record. Record in the journal the salaries, wages, taxes withheld, group insur- ance premiums collected, union dues withheld, and net amount paid, and post to the proper ledger accounts. Y POINTS 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 lia- ployees' Pennsylvania bility for the amount withheld from the employees' wages to pay their employment Tax part of the group insurance premium. The amount withheld should be calculated (0.0006) recorded as a credit to Group Insurance Premiums Collected. tal wages of each Record in the journal the employer's payroll taxes and the liabilities e. There is no taxable created; post to the appropriate ledger accounts. it on the employees' the tax. 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. POINTS 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- deduct 30c premium tal status has not changed). 000 of group No . 6 Thomas J. Sokowski completed a new Form W-4, showing that his mar- arried by each ital status changed to single and that the number of withholding allow- ast payday of each 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. AUDIT TEST November 6 12, 180.03 No. 8 Pay the treasurer of the union the amount of union dues withheld during the month of October. Time Clerk's Report No. 42 For the Week Ending October 24, 20-- Employee Time Record Time Time SMT W T F S Worked Lost Bonno, A. V. ... 8 8 8 . . . Ford, C. L. ..... 8 40 hrs. Russell, V. A. 00 00 00 00 40 hrs. 8 8 8 . . . 8 38 hrs. 2 hrs.* Ryan, N. A. .... 8 8 40 hrs. . . . Student . ... . .. . 8 7 36 hrs. Williams, R. V. .. 8 39 hrs. . . 1 hr.* * *Time lost on account of family function; deduct 2 hours' pay. **Time lost because of tardiness; deduct 1 hour's pay.Payroll Accounting 2020 CHAPTER 7 . Payroll Project 7-13 Time Clerk's Report No. 43 For the Week Ending October 31, 20-- Employee Time Record Time Time S M T W T F S Worked Lost Bonno, A. V. ... 0 00 00 00 00 00 DO A 00 00 00 00 40 hrs. 40 hrs. . . . Ford, C. L. ..... . . . Russell, V. A. .. . 40 hrs. Ryan, N. A. .... 40 hrs. . . . Student . ..... . 36 hrs. . . . Williams, R. V. .. 40 hrs. . . . No. 9 Prepare the payroll for the first pay period 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. PAY POINTS Note: Virginia Russell worked only 38 hours in the week ending Octo- Make changes in November 6 ber 24. Therefore, compute her pay for that week by multiplying 38 by pay. Refer to Nos. 5, 6, and 7. $15.00 (her hourly rate). Ruth Williams 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 tardiness and absenteeism during the year, the company discharged Ruth Williams today. For the week ending Novem- ber 7, she was late a total of six hours; and for this week, she missed two PROJECT AUDIT TEST 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 Net Paid $ 1,494.06 her dismissal pay ($1,223.08), she was paid for the week ending Novem- ber 7 (34 hours, or $519.86) and the days worked this current week (22 hours, or $336.38). The total pay for the two partial weeks is $856.24. D 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 ($2,079.32) 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 PAY POINTS Williams. When posting to the earnings record, make a notation of Wil- Prepare a Wage and Tax liams's discharge on this date. Statement, Form W-2, to be 2 Prepare the journal entries to transfer the net cash and to record Wil- given to Williams. 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.HAPTER 7 . Payroll Project Payroll Accounting 2020 10 4 November 16 eral, state, and city No. 11 Electronically deposit the amount of FICA taxes and federal income taxes ms and journalize for the October payrolls and complete the Federal Deposit Information IS. Worksheet (page 7-49). Since the company is subject to the monthly deposit rule, the deposit is due on the 15th of the following month. See the deposit requirements explained on pages 3-17 to 3-19. November 15 is a Sunday; therefore, the deposit is to be made on the next business day. Prepare the journal entry to record the deposit of the taxes, and post to 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 Revenue. The deposit rule that affects Glo-Brite Paint Company states that if the withheld taxes are between $350 and $16,000 per month, the company OINTS must deposit the tax monthly by the 15th of the following month. The withheld taxes for the October payrolls were $1,212.21. d deposit forms Prepare the journal entry to record the deposit of the taxes, and post signature, use to the appropriate ledger accounts. eill's name. 2 Complete the Philadelphia Employer's Return of Tax Withheld cou- pon (Monthly Wage Tax), which appears on page 7-51. November 17 No. 13 Prepare an employee's earnings 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 AUDIT TEST No. 15 With this pay, the company has decided to offer employees a Savings 425.15 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. James Ferguson: $500 contribution per pay period Dewey Mann: $250 contribution per pay period Joseph O'Neill: $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 deduc- tion column (on both the payroll register and employee's earnings record)