The Company

On October 1, Lolita M. Lovely established a Hair Salon which she named Lolita's Lovely Locks.Her business is organized as a corporation.The business provides hair cuts, hair styling, and hair grooming for both men and woman.

Company8500 Dodge St.

Address:Omaha, NE68105

Including herself, Lolita has three paid employees.Lolita pays herself a salary.Her two employees are paid hourly.The employee earnings records have the payment details including pay rates, withholding allowances, pay flex deductions, identification information, etc.

Tax InformationFederal Tax ID (EIN):47-3882497

All taxes and withholding amounts are based on earnings after deduction of the PayFlex amount.

OASDI (Social Security) tax rate 6.2% (no employee will go over the maximum in this assignment).

Medicare (HI or Health Insurance) tax rate 1.45%

Nebraska Unemployment tax rate 2.4% on the first $9,000 of earnings.

Federal Unemployment tax rate 0.6% (= .006) on the first $7,000 of earnings

Transactions and Requirements

1. Complete the Earnings Records and Payroll RegistersCalculate the earnings, deductions and net pay for each employee.Use the income tax withholding tables included with your text.Use the wage bracket (table method) to compute income tax withholding.Calculate and enter the deduction for State withholding assuming that the State income tax withholding is equal to 15% of the Federal income tax withholding.The Social Security (OASDI) tax rate is 6.2% of taxable wages (none of the employees will have earnings in excess of the social security base.The Medicare (HI) tax rate is 1.45%.

October Salary & Wage Information

Employees Paid HourlyRegularOvertime

HoursHours

Linda A. Osborne16812

Kathryn B. Jones1682

Salaries Employee:Lolita M. Lovely$3,500 per Month

NovemberSalary & Wage Information

Employees Paid HourlyRegularOvertime

HoursHours

Linda A. Osborne17622

Kathryn B. Jones1680

Salaries Employee

Lolita M. Lovely$3,500 per Month

DecemberSalary & Wage Information

Employees Paid HourlyRegularOvertime

HoursHours

Linda A. Osborne16812

Kathryn B. Jones1304

Salaries Employee

Lolita M. Lovely$3,500 per Month

1. Journal entries.For the transactions listed below, appropriate journal entries and post the entries to the appropriate general ledger accounts.

October

Oct31Journalize and post the entry to record the October payroll.Your entry should include: Salaries & Wages expense, all of the related deductions, and a credit to cash for the net pay.

Oct31Journalize and post the entry to record the employer's payroll tax expense for the month of October.Your entry should include payroll tax expense and separately identified amounts for each payroll tax liability item.

November

Nov10Journalize and post the entry to record the payment (deposit) of the Federal income tax, Social Security tax, and Medicare tax.Your entry should include both the employee and employer's share of Social Security taxes and Medicare taxes.

Nov30Journalize and post the entry to record the November payroll.Your entry should include: Salaries & Wages expense, all of the related deductions, and a credit to cash for the net pay.

Nov30Journalize and post the entry to record the employer's payroll tax expense for the month of November. Your entry should include payroll tax expense and separately identified amounts for each payroll tax liability item.

December

Dec10Journalize and post the entry to record the payment (deposit) of the Federal income tax, Social Security tax, and Medicare tax.Your entry should include both the employee and employer's share of Social Security taxes and Medicare taxes.

Dec30Journalize and post the entry to record the December payroll.Your entry should include: Salaries & Wages expense, all of the related deductions, and a credit to cash for the net pay.

Dec30Journalize and post the entry to record the employer's payroll tax expense for the month of December. Your entry should include payroll tax expense and separately identified amounts for each payroll tax liability item.

3.Payroll Tax ReportsPrepare the quarterly and annual payroll tax reports indicated below.The source of the information for these reports is the employee earnings records, the journal entries, and the general ledger accounts.Some of the identifying information has been entered on the form.However, carefully review each form and make sure all necessary identifying information is entered on all forms.

(1)Prepare the Federal form 941: Employer's quarterly federal return for the quarter ended December 31.Even though the year is 2016, you will use some 2015 Form.You should assume that the December taxes will be deposited on January 10 of the following year.Therefore, the total tax liabilities and the total deposits should be the same amount.Be sure to fill in all information and answer all applicable questions.

(2)Prepare the Employer's quarterly Nebraska unemployment tax return for the quarter ended December 31.Also prepare the Nebraska wage report.

(3)Prepare the Federal form 940 Federal unemployment tax return for the

year ended December 31.Even though the year is 2016, you will use some 2015 Form.There are no adjustments required on lines 9, 10 or 11 of the form 940.all required information including identifying information and applicable questions.The unemployment taxes will be deposited on January 20.

(4)Prepare one copy of the W-2 form for each employee for the year ended December 31.Be sure to fill in all appropriate amount boxes and identification boxes.None of the employees are covered by a retirement plan.None of the employees are deceased.None of the employees are statutory employees.For the W-2 forms, the Federal ID number is:47-3882497.For the W-2 forms, the Nebraska State ID number is 123456.

Enter Your Name: Use The Tabs at the Bottom to Switch Between Worksheels Use the Vertical Scroll Bar to See the rest of the Journal General Journal Page 1 I II Post Date Account Title Ref Debit 1-001 Cash 102 $ 250,000.00 Common Stock 301 $ 250,000.00 File 2 Payroll_Accounting_Forms(1) (7)(1)-2 Q Search Sheet Home Insert Page Layout Formulas Data Review View Colors Width: Automatic Gridlines Headings Aa View View Themes Aa Fonts Margins Orientation Size Print Breaks Background Print Page Height: Automatic Area Titles Setup Print Print C25 X V fx B E G H J K L M N O P Q R S T Use The Tabs at the Bottom to Switch Between Worksheets Use the Vertical Scroll Bar to See the rest of the Accounts Cash Account No. 102 Balance Date Item Ref Debit Credit Debit Credit 1-Oct J1 250,000.0 250,000.00 Social Security Taxes Payable Account No. 211 Balance Date Item Ref Debit Credit Debit Credit Medicare Taxes Payable Account No 212 Journal General Ledger Trial Balance Payroll Registers Earnings Records + Ready + 100%File 2 Payroll_Accounting_Forms(1) (7)(1)-2 Q Search Sheet Home Insert Page Layout Formulas Data Review View Aa Colors Width: Automatic Gridlines Headings View View Themes Aa Fonts Margins Orientation Size Print Breaks Background Print Page Automatic Area Titles Setup Height: Print Print G6 4 X V fx A B D E F G H K L M N O P Q R S T A CN Use The Tabs at the Bottom to Switch Between Worksheets Lolita's Lovely Locks Trial Balance Debits Credits Cash 250,000.00 Social Security Taxes Payable Medicare Taxes Payable Federal Income Taxes Payable State Income Taxes Payable Pay flex Withholding Payable Nebraska Unemployment Taxes Payable Federal Unemployment Taxes Payable Common Stock 250,000.00 Salaries & Wages Expense Payroll Tax Expense Totals 250,000.00 250,000.00 22 23 Fantastic, I am In Balance Journal General Ledger Trial Balance Payroll Registers Earnings Records + Ready + 100%October Payroll Register Earnings Deductions Regular Overtime Total Pay flex Taxable Soc Sec Medicare Fed Income State Total Net Employee Tax Income Tax Deductions Pay Name Pay Pay Pay Deduction Earnings Tax Tax Lolita Lovely Linda A. Osborne Kathryn B. Jones Totals October Taxable Unemployment Analysis Prior Current Cumulative Earnings Subject to Taxable Taxable Taxable Nebraska Federal Employer's Payroll Taxes Earnings Earnings Earnings Tax Tax Lolita Lovely Social Security Tax Linda A. Osborne Medicare Tax Kathryn B. Jones State Unemployment Tax Federal Unemployment Tax Total Payroll Tax Expense NE & Federal Tax Rates 2.4% 0.6% Unemployment Taxes November Payroll Register Earnings Deductions Employee Regular Overtime Total Pay flex Taxable Soc Sec Medicare Fed Income State Total Net Pay Deduction Earnings Tax Tax Tax Income Tax Deductions Pay Name Pay Pay Lolita Lovely Linda A. Osborne Kathryn B. Jones Totals November Taxable Unemployment Analysis Prior Current Cumulative Farninne Suhiart toNovember Taxable Unemployment Analysis Prior Current Cumulative Earnings Subject to Taxable Taxable Taxable Nebraska Federal Employer's Payroll Taxes Earnings Earnings Earnings Tax Tax Lolita Lovely Social Security Tax Linda A. Osborne Medicare Tax Kathryn B. Jones State Unemployment Tax Federal Unemployment Tax Total Payroll Tax Expense NE & Federal Tax Rates 2.4% 0.6% Unemployment Taxes December Payroll Register Earnings Deductions Employee Regular Overtime Total Pay flex Taxable Soc Sec Medicare Fed Income State Total Net Name Pay Pay Pay Deduction Earnings Tax Tax Tax Income Tax Deductions Pay Lolita M Lovely Linda A. Osborne Kathryn B. Jones Totals December Taxable Unemployment Analysis Prior Current Cumulative Earnings Subject to Taxable Taxable Taxable Nebraska Federal Employer's Payroll Taxes Earnings Earnings Earnings Tax Tax Lolita Lovely Social Security Tax Linda A. Osborne Medicare Tax Kathryn B. Jones State Unemployment Tax Federal Unemployment Tax Total Payroll Tax Expense NE & Federal Tax Rates 2.4% 0.6% Unemployment TaxesFile 2 Payroll_Accounting_Forms(1) (7)(1)-2 Q Search Sheet Home Insert Page Layout Formulas Data Review View Aa Width: 1 page Gridlines Headings Colors View View Themes Aa Fonts Margins Orientation Size Print Breaks Background Print Page Titles Setup Height: 1 page Print Print Area B59 X V fx |4th Quarter Totals P R S T U V w B C G H K Q E F L M N O 49 Address: 3016 Dodge St. 50 Omaha, NE 68103 51 52 Earnings Deductions 53 Monthly Pay Period Regular Overtime Total Pay flex Taxable Soc Sec Medicare Fed Income State Total Net Pay 54 Pay Pay Deduction Earnings Tax Tax Tax Income Tax Deductions 55 October 56 November 57 December 58 59 4th Quarter Totals 60 Annual Totals 61 62 63 64 65 66 67 68 69 88 89 90 91 92 93 D Journal General Ledger Trial Balance Payroll Registers Earnings Records + + 90% Ready