Required information

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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 finish 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 99992901685WTH. Wayland has determined it will pay its employees on a semimonthly basis. Federal income tax should be computed using the percentage method.

For Part 1 of this project, you will complete payroll for the last month (December) of the fourth quarter (Q4) of 2019, which consists of the final 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 percent on the first $35,300. The state withholding rate is 4.95 percent for all income levels, deductions, and marital statuses, a table has been included to assist with calculations of state tax due for employees. No employee will reach the SUTA wage cap.

Rounding can become 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.

Example: Annual Salary to Hourly Rate, Nonexempt Employee

Employee Varden's annual salary is $42,000, and he is a nonexempt employee.

Hourly rate = $42,000 / (52 40) = $42,000 / 2,080

Hourly rate = $20.19231 per hour

Example: Period Gross Pay, Salaried Employee

Employee Chinson earns an annual salary of $24,000 and is paid semimonthly.

Period gross pay = $24,000 / 24 = $1,000 gross pay

For pay periods with holiday hours: determine the amount paid per day, multiply by the number of days applicable to each pay.

Annual salary: $24,000 / (52 5) = $24,000 / 260 = $92.30769 (rounded to 5 decimal points) per day.

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 28-29.

Christmas, which is a Wednesday. Employees receive holiday pay for Tuesday, December 24, and Wednesday, 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 in Appendix 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 pre-tax for federal income tax and Utah income tax. Round calculations to get to final tax amounts and 401(k) contributions after calculating gross pay.

Federal Withholding Allowance (less 401(k), Section 125) $175.00 per allowance claimed

Federal Unemployment Rate (employer only) (less Section 125) 0.6% on the first $7,000 of wages

Semimonthly Federal Percentage Method Tax Table Appendix C Table #3

State Unemployment Rate (employer only) (less Section 125) 2.6% on the first $35,300 of wages

State Withholding Rate (less 401(k), Section 125) See Utah Schedule 3, Table A-1 or use the Excel 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 Number Name and Address Payroll information

00-Chins Anthony Chinson Married, 1 Withholding allowance

530 Sylvann Avenue Exempt

Logan, UT 84321 $24,000/year + commission

435-555-1212 Start Date: 10/1/2019

Job title: Account Executive SSN: 511-22-3333

00-Wayla Mark Wayland Married, 5 withholding allowances

1570 Lovett Street Exempt

Logan, UT 84321 $75,000/year

435-555-1110 Start Date: 10/1/2019

Job title: President/Owner SSN: 505-33-1775

01-Peppi Sylvia Peppinico Married, 7 withholding allowances

291 Antioch Road Exempt

Logan, UT 84321 $43,500/year

435-555-2244 Start Date: 10/1/2019

Job title: Craftsman SSN: 047-55-9951

01-Varde Stevon Varden Married, 2 withholding allowances

333 Justin Drive Nonexempt

Logan, UT 84321 $42,000/year

435-555-9981 Start Date: 10/1/2019

Job title: Craftsman SSN: 022-66-1131

02-Hisso Leonard Hissop Single, 4 withholding allowances

531 5th Street Nonexempt

Logan, UT 84321 $49,500/year

435-555-5858 Start Date: 10/1/2019

Job title: Purchasing/Shipping SSN: 311-22-6698

00-Succe Student Success Single, 1 withholding allowance

1650 South Street Nonexempt

Logan, UT 84321 $36,000/year

435-556-1211 Start Date: 10/1/2019

Job title: Accounting Clerk SSN: 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 07/16/2024, and your Social Security number is 555-55-5555. You are considered a nonexempt employee, have one withholding allowance, and paid a rate of $36,000 per year.

The balance sheet for WCW as of November 30, 2019, is as follows:

Wayland Custom Woodworking

Balance Sheet

November 30, 2019

Assets Liabilities & Equity

Cash $ 1,085,722.16 Accounts Payable $ 112,640.22

Supplies 42,240.12 Salaries and Wages Payable 10,508.46

Office Equipment 87,250.00 Federal Unemployment Tax Payable 89.55

Inventory 167,090.00 Social Security Tax Payable 3,219.22

Vehicle 25,000.00 Medicare Tax Payable 752.88

Accumulated Depreciation, Vehicle State Unemployment Tax Payable 674.99

Building 164,000.00 Employee Federal Income Tax Payable 1,501.38

Accumulated Depreciation, Building Employee State Income Tax Payable 1,160.92

Land 35,750.00 401(k) Contributions Payable 1,018.66

Total Assets 1,607,061.28 Employee Medical Premiums Payable 750.00

Notes Payable 224,750.00

Utilities Payable

Total Liabilities 357,061.28

Owners' Equity 1,250,000.00

Retained Earnings -

Total Equity 1,250,000.00

Total Liabilities and Equity 1,607,061.28

Voluntary deductions for each employee are as follows:

Name Deduction

Chinson Insurance: $50/paycheck

401(k): 3% of gross pay

Wayland Insurance: $75/paycheck

401(k): 6% of gross pay

Peppinico Insurance: $75/paycheck

401(k): $50 per paycheck

Varden Insurance: $50/paycheck

401(k): 4% of gross pay

Hissop Insurance: $75/paycheck

401(k): 3% of gross pay

Student Insurance: $50/paycheck

401(k): 3% of gross pay

For additional instructions on how to navigate and work through through Part 1 of this project, please download the student project guide here.

rev: 12_09_2019_QC_CS-193117, 04_17_2020_QC_CS-208815, 05_14_2020_QC_CS-212632

Required:

2. Complete the payroll process for Wayland Custom Woodworking's last two pay periods of the fourth quarter. Please note that you must carry the ending balance from each account in the December 15 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 General Ledger to another, along with a guided walkthrough example of this process, refer to the project user guide in the project information section above.

December

Sunday Monday Tuesday Wednesday Thursday Friday Saturday

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15 16 17 18 19 20 21

22 23 24 25 26 27 28

29 30 31

December 15

December 15 is the end of the first pay period for the month of December. Employee pay will be disbursed on December 19, 2019. Remember that the employees are paid on a semimonthly basis.

Compute the net pay and update the Employees' Earnings Records with the December 15 pay and the new YTD information. Any hours worked in excess of 80 hours during this pay period are considered overtime for nonexempt employees.

Complete the Employee Gross Pay tab.

Complete the Payroll Register for December 15 Pay. Employee pay will be disbursed on December 19, 2019.

Refer to the Employee Earning Record Forms for each employee for the current YTD amounts after you have completed the December 15 Payroll Register and update each EERF with the amounts from the current period. YTD amounts from the previous four pay periods of the fourth quarter are shown for each employee.

Complete the General Journal entries for the December 15 payroll.

Post the journal entries to the General Ledger. Amounts for the ledger accounts from the previous four pay periods of the fourth quarter are shown.