Three Month Project
Francine Stewart Gross Federal State Social Medicare 401(k) Charitable Earnings Income Tax Income Tax Security Tax Tax Deduction Cont. 1st quarter so so so so so $0 30 2nd quarter ' so so so ' so so so so 3rd quarter ' $1,807.70 $147.75 $83.53 ' $112.03 $26.21 $36.15 so Note that all tax payments and lings are made on the due date. Based on the data provided here, you will complete the following: 1. Establish an employee earnings record for each of the company's four employees. Complete the top portion of each record. 2. Establish and complete the payroll register for each weekly pay period in the fourth quarter. When calculating federal income tax withholding, use the withholding tables where possible, and refer to the percentage method only when necessary. For simplicity, calculate the state income tax withholding as 5% of each employee's taxable pay (which is the same as taxable pay for FWT). Recall that state income tax 1"..."1._'.'II-.' l' - _._-._ . l' l'-.II.O' .. ' .1 noon- ._0' Esollchecks Weekly Hours Worked Weekly Start Maggie William Weekly Start Maggie William Date Hough Finnegan Date Hough Finnegan September 28 40 44 November 16 41 34.5 October 5 42 37 November 23 0 40 October 12 38 40 November 30 0 41 October 19 40 46.5 December 7 0 43.5 October 26 43.5 42 December 14 0 42.5 November 2 40 45 December 21 0 40 November 9 39 40 WARNING! The above dates are weekly start dates. Refer to a calendar to determine the weekly end dates and associated pay dates. Keep in mind that tax liability and payment amounts are determined based on the weekly pay dates. 3. Complete an employee earnings record for the 4th quarter for each of the four employees. Divide the voluntary deductions from the payroll register appropriately across the associated columns within the Aare remitted to the employees in the same order {Hough, Finnegan, Jones, Stewart) each pay period and are written from a bank account that is used solely' for these payments. The rst payroll check written in October is check #4711. Note that all charitable contributions are deemed to be made on the nal day of each pay period. The following information will be required for the completion of these records for the two employees who are compensated via an howl)? wage: PIEDI'I m dates and associated pay dates. Keep in mind that tax liability and payment amounts are determined based on the weekly pay dates. 3. Complete an employee earnings record for the 4th quarter for each of the four employees. Divide the voluntary deductions from the payroll register appropriately across the associated columns within the employee earnings records. If directed to do so by your instructor, record the necessary journal entries for each pay period. . Complete Form 941 for both the 3rd and 4th quarters. Assume that the employees earned the same amount during each pay period of the 3rd quarter and that there were four, ve, and four pay periods during the months of July, August, and September, respectively. Note that based on the lookback period, the company is a monthly depositor. Assume that all necessary deposits were made on a timely basis and that the employer made deposits equal to the total amount owed for each quarter. Although Vermont quarterly state payroll forms are also led by Ampersand, lnc., you will not complete these. If directed to do so by your instructor, record the necessary journal entries associated with each Form 941 (including those required for any tax payments made). NOTE! Recall from the Form 941 Rounding Considerations section that quarter and year-end tax figures should not be calculated based on the total taxable earnings for the respective quarter or year. Instead, to avoid rounding discrepancies, tax figures within Part 2 of Form 941 should be determined for each employee by adding the individual taxes across each pay period. l Ampersand, Inc., is a small business that operates in Somerset, VT. The company is located at 732 Appalachian Way, Somerset, VT 05363. Its federal Employer Identification Number is 44-4444444, and its president, who signs all tax forms, is Stacey Jones (telephone #802-555-3917). The company does not wish to name a third- party designee on forms. During 2020 four individuals are employed by Ampersand, Inc. These employees are as follows: Social Federal W/H State W/H Marital Name Address Security # Allowances Allowances Status Maggie 13 Spruce Street 222-22-2222 Single Hough Somerset, VT 05363 William 7 Smith Boulevard 999-99-9999 2 2 Married Finnegan Somerset, VT 05363 Stacey 8110 Browning Place 555-55-5555 2 Single Jones Somerset, VT 05363 Francine 101 Park Court 888-88-8888 N/A N/A Married Stewart Somerset, VT 05363Note that Francine Stewart was hired in September, and her first day of work was Monday, September 21. On her W-4 Form Francine left sections 2 through 4 blank. Francine files as married filing jointly on her tax return. Additionally, due to an economic downturn, Maggie Hough was laid off in late November, with her last day of work on Friday, November 20. All employees of Ampersand, Inc., work a regular 40-hour workweek (thus all hours worked over 40 in a given week are overtime hours), receive overtime pay at a rate of 1.5 times the regular wage rate, and are paid weekly on Sunday for the most recent week (which runs from Monday through Sunday, although employees never work on weekends). The SUTA tax rate applicable to Ampersand, Inc., is 2.5%, while the SUTA wage base in Vermont is $16,100. Earnings and voluntary deduction information for each of the four employees is as follows: Regular Annual Weekly 401(k) Weekly Charitable Name Wage Rate Salary Deduction Contribution Maggie Hough $14/hour N/A 5% of gross pay $10 William Finnegan $18/hour N/A 4% of gross pay $5 Stacey Jones N/A $262,000.44 N/A $15 Francine Stewart N/A $94,000.40 2% of gross pay N/AThe rst three quarters of the year have passed, and all payroll-related activity has been properly accounted for as of 9/ 3 0/ 2020. Quarterly payroll data for each of the four employees is as follows: Maggie Hough Gross Federal State Social Medicare 401(k) Charitable Quarter Earnings Income Tax Income Tax Security Tax Tax Deduction Cont. 1st quarter $7,280 $533 $345.80 $451.36 $105.56 $364 $130 2nd quarter ' $7.280 ' $533 ' $345.80 $451.36 $105.56 $364 $130 3rd quarter ' $7.230 ' $533 ' $345.80 $451.36 $105.56 $364 $130 William Finnegan Gross Federal State Social Medicare 401(k) Charitable Quarter Earnings Income Tax Income Tax Security Tax Tax Deduction Cont. 1st quarter $9,360 $390 $449.28 $580.32 $135.72 $374.40 $65 2nd quarter $9,360 $390 $449.28 $580.32 $135.72 $374.40 $65 3rd quarter $9,360 $390 $449.28 $580.32 $135.72 $374.40 $65Stacey Jones Gross Federal State Social Medicare 401(k) Charitable Quarter Earnings Income Tax Income Tax Security Tax Tax Deduction Cont. 1st quarter $65,500.11 $15,535.91 $3,274.96 $4,061.07 $949.78 $0 $195 2nd quarter $65,500.11 $15,535.91 $3,274.96 $4,061.07 $949.78 SO $195 3rd quarter $65,500.11 $15,535.91 $3,274.96 $415.26 $949.78 SO $195 Francine Stewart Gross Federal State Social Medicare 401(k) Charitable Quarter Earnings Income Tax Income Tax Security Tax Tax Deduction Cont. 1st quarter $0 $0 $0 $0 $0 2nd quarter $0 $0 $0 $0 SO $0 $0 Ord quarter +1 on7 70 too co COL 15
