[The following information applies to the questions displayed below.]

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 12850 Old Highway 50, Glenbrook, Nevada, 89413, phone number 775-555-9877. The owner is Mark Wayland. Waylands EIN is 91-7444533, and the Nevada Employer Account Number is E6462582020-6. 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 2020, 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.

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. NOTE: Leave the hourly rate rounded to 5 decimal places as shown in this example. After the gross pay has been calculated, then round the result to two decimal points prior to calculating taxes or other withholdings.

Example: Annual Salary to Hourly Rate, Nonexempt Employee

Employee Coopers annual salary is $62,000, and he is a nonexempt employee.

Hourly rate = $62,000 / (52 40) = $62,000 / 2,080

Hourly rate = $29.80769 per hour

Example: Period Gross Pay, Salaried Employee

Employee Chinson earns an annual salary of $48,000 and is paid semimonthly.

Period gross pay = $48,000 / 24 = $2,000 gross pay

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

Annual salary: $48,000 / (52 5) = $48,000 / 260 = $184.61538 (rounded to 5 decimal points) per day. Once you have the holiday pay, subtract it from their salary for the period for regular time.

Employees are paid for the following holidays occurring during the final quarter:

• Thanksgiving day and the day after, Thursday and Friday, November 26-27.
• Christmas, which is a Friday. Employees receive holiday pay for Thursday, December 24, and Friday, December 25.

For the completion of this project, refer to the tax-related information in the table below. Employees' 401(k) and insurance are pre-tax for federal income tax. The SUTA (UI) rate for Wayland Custom Woodworking is 3.25% on the first $32,500. There is an additional 0.05% for Career Enhancement Program (CEP). Both FUTA and SUTA have a deduction for section 125 but not for 401(k) contributions by the employee. Employer contribution of section 125 is 1.5 times the employee portion and should be added to wages for completion of FUTA and SUTA forms. For federal tax withholding calculations, use the percentage method tables for manual payroll systems with Forms W-4 from 2020 or later. Assume, all W-4s are received in 2020 and the Step 2 of Form W-4 is not checked.

Federal Unemployment Rate (employer only)(less Section 125)	0.6% on the first $7,000 of wages
Semimonthly Federal Percentage Method for Manual Payrolls Tax Table	Appendix C
State Unemployment Rate (employer only)(less Section 125)	3.25% on the first $32,500 of wages
Nevada Career Enhancement Program (employer only) (less Section 125)	0.05% on the first $32,500 of wages

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/Joint; 2 < 17
	530 Chimney Rock Road	Exempt
	Stateline, NV 89449	$48,000/year + commission
	775-555-1212	Start Date: 10/1/2020
	Job title: Account Executive	SSN: 511-22-3333
00-Wayla	Mark Wayland	Married/Joint; 3 < 17, 1 Other
	1650 Power House Drive	Exempt
	Glenbrook, NV 89413	$85,000/year
	775-555-1110	Start Date: 10/1/2020
	Job title: President/Owner	SSN: 505-33-1775
01-Peppi	Sylvia Peppinico	Married/Joint; 1 < 17, 1 Other
	1575 Flowers Avenue	Exempt
	Glenbrook, NV 89413	$58,500/year
	775-555-2244	Start Date: 10/1/2020
	Job title: Craftsman	SSN: 047-55-9951
01-Coope	Stevon Cooper	Single; None
	2215 Lands End Drive	Nonexempt
	Glenbrook, NV 89413	$62,000/year
	775-555-9981	Start Date: 10/1/2020
	Job title: Craftsman	SSN: 022-66-1131
02-Hisso	Leonard Hissop	Single; 1 Other
	333 Engine House Circle	Nonexempt
	Glenbrook, NV 89413	$51,500/year
	775-555-5858	Start Date: 10/1/2020
	Job title: Purchasing/Shipping	SSN: 311-22-6698
00-Succe	Student Success	Single; None
	16 Kelly Circle #2	Nonexempt
	Glenbrook, NV 89413	$42,000/year
	775-556-1211	Start Date: 10/1/2020
	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 16 Kelly Circle #2, Glenbrook, NV 89413. Your phone number is 775-556-1211, you were born July 16, 1985, your Nevada drivers license number is 168575381944 expiring in 07/16/2024, and your Social Security number is 555-55-5555. You are considered a nonexempt employee, have no dependents or other income, and paid a rate of $42,000 per year.

The balance sheet for WCW as of November 30, 2020, is as follows:

Wayland Custom Woodworking Balance Sheet November 30, 2020
Assets		Liabilities & Equity
Cash	$ 1,075,258.73	Accounts Payable	$ 112,747.25
Supplies	42,240.11	Salaries and Wages Payable	14,038.32
Office Equipment	87,250.00	Federal Unemployment Tax Payable	58.67
Inventory	167,099.00	Social Security Tax Payable	3,967.36
Vehicle	25,000.00	Medicare Tax Payable	927.88
Accumulated Depreciation, Vehicle		State Unemployment Tax Payable	1,039.82
Building	164,000.00	Career Enhancement Program Payable	16.00
Accumulated Depreciation, Building		Employee Federal Income Tax Payable	1,423.27
Land	35,750.00	401(k) Contributions Payable	1,203.14
Total Assets	1,596,597.84	Employee Medical Premiums Payable	750.00
		Notes Payable	210,426.13
		Total Liabilities	346,597.84
		Owners' Equity	1,250,000.00
		Retained Earnings	-
		Total Equity	1,250,000.00
		Total Liabilities and Equity	1,596,597.84

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
Cooper	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: 02_18_2021_QC_CS-253787, 05_26_2021_QC_CS-265303, 06_02_2021_QC_CS-265303

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
		1	2	3	4	5
6	7	8	9	10	11	12
13	14	15	16	17	18	19
20	21	22	23	24	25	26
27	28	29	30	31

No employee has additional information in Step 4 of their W-4s, all W-4s were received in 2020, no box 2c has been checked. Refer page 5 of publication 15-T

December 15

December 15 is the end of the first pay period for the month of December. Employee pay will be disbursed on December 21, 2020. 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 88 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 21, 2020.
• 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.