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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 complete a 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. Waylands 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 the percentage method.

For Part 1 of this project, you will complete payroll for the last month (December) of the fourth quarter (Q4) of 2018, which consists of the final two 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 $34,300. The state withholding rate is 4.95 percent for all income levels and marital statuses, a table has been included to assist with calculations.

Rounding can create 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, Vardens salary is $42,000 and is a nonexempt employee, so the calculation will be $42,000/2,080, which would give you $20.19231 per hour, and use this to compute the employees 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 employees yearly salary and dividing it by 24, which is the number of payroll periods with a semimonthly frequency. For example, Chinsons salary is $24,000 and is a full time employee. Chinsons 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 for Monday, 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 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 pretax for federal income tax and Utah income tax.

Federal Withholding Allowance (less 401(k), Section 125)	$172.90 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	AppendixC Page 393 Table #3
State Unemployment Rate (employer only) (less Section 125)	2.6% on the first $34,300 of wages
State Withholding Rate (less 401(k), Section 125)	See Utah Schedule 3, Table 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 Waylands 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: 10/1/2018
	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: 10/1/2018
	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: 10/1/2018
	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: 10/1/2018
	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: 10/1/2018
	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: 10/1/2018
	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 7/16/2019, 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 September 30, 2018, is as follows:

Wayland Custom Woodworking Balance Sheet September 30, 2018
Assets				Liabilities & Equity
Cash	$	1,125,000.00		Accounts Payable	$	112,490.00
Supplies		27,240.00		Salaries and Wages Payable
Office Equipment		87,250.00		Federal Unemployment Tax Payable
Inventory		123,000.00		Social Security Tax Payable
Vehicle		25,000.00		Medicare Tax Payable
Accumulated Depreciation, Vehicle				State Unemployment Tax Payable
Building		164,000.00		Employee Federal Income Tax Payable
Accumulated Depreciation, Building				Employee State Income Tax Payable
Land		35,750.00		401(k) Contributions Payable
Total Assets		1,587,240.00		Employee Medical Premiums Payable
				Notes Payable		224,750.00
				Utilities Payable
				Total Liabilities		337,240.00
				Owners' Equity		1,250,000.00
				Retained Earnings		-
				Total Equity		1,250,000.00
				Total Liabilities and Equity		1,587,240.00

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.

Required:

1. Complete the W-4 and, using the given information, complete the I-9 form to start your employee file. Complete it as if you are single with one withholding, you contribute 3 percent to a 401(k), and health insurance is $50 per pay period. The following file provides the lists of acceptable documents for Form I-9.

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 15

December 15 is the end of the first pay period for the month of December. Employee pay will be disbursed on December 20, 2018. 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 20, 2018.
• 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