Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

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

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 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 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.

Example: Annual Salary to Hourly Rate, Nonexempt Employee

Employee Vardens 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 2829.
  • 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) 0.6% on the first $7,000 of wages
Semimonthly Federal Percentage Method Tax Table Appendix C Table #3
State Unemployment Rate (employer only) 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 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: 10/1/2019
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 $ 1,085,254.38 Accounts Payable $ 112,747.25
Supplies 42,240.11 Salaries and Wages Payable 10,158.53
Office Equipment 87,250.00 Federal Unemployment Tax Payable 85.71
Inventory 167,139.49 Social Security Tax Payable 3,158.42
Vehicle 25,000.00 Medicare Tax Payable 738.66
Accumulated Depreciation, Vehicle State Unemployment Tax Payable 681.74
Building 164,000.00 Employee Federal Income Tax Payable 1427.61
Accumulated Depreciation, Building Employee State Income Tax Payable 1,133.72
Land 35,750.00 401(k) Contributions Payable 1,002.34
Total Assets 1,606,633.98 Employee Medical Premiums Payable 750.00
Notes Payable 224,750.00
Utilities Payable
Total Liabilities 356,633.98
Owners' Equity 1,250,000.00
Retained Earnings -
Total Equity 1,250,000.00
Total Liabilities and Equity 1,606,633.98

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

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

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.

image text in transcribedimage text in transcribedimage text in transcribedimage text in transcribedimage text in transcribedimage text in transcribedimage text in transcribed]image text in transcribed

Employee Gross pay Payroll Register Chinson EERF Wayland EERF Peppinico EERF Varden EERF Hissop EERF Success EERF General Journal General Ledger Complete the payroll register for the December 15 pay period. (Round your intermediate computations and final answers to 2 decimal places.) 12/15/2019 Run Date Payroll End Date Company Name: Wayland Custom Woodworking Check Date 12/19/2019 12/15/2019 Name M/S # of W/H Hourly Rate No of Regular Hours No of Overtime Hours No of Holiday Hours Commissions Gross Earnings Insurance Taxable Wages 401(k) for Federal W/H $ 0.00 0.00 0.00 0.00 0.00 0.00 0.00 $ 0.00 Anthony Chinson Mark Wayland Sylvia Peppinico Stevon Varden Leonard Hissop Student F Success Taxable Wages for FICA $ 0.00 0.00 0.00 0.00 0.00 0.00 0.00 Totals 0.00 $ $ Name Gross Earning Net Pay Check No. Anthony Chinson Mark Wayland Sylvia Peppinico Stevon Varden Leonard Hissop Student F Success 0.00 Taxable Wages for Taxable Wages Federal W/H Federal W/H Social Security Tax Medicare W/H for FICA State W/H Tax $ 0.00 $ 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 $ 0.00 $ 0.00 $ 0.00 $ 0.00 $ 0.00 $ 0.00 174580 174581 174582 174583 174584 174585 Totals $ 0.00 $ 0.00 Employee Gross pay Payroll Register Chinson EERF Wayland EERF Peppinico EERF Varden EERF Hissop EERF Success EERF General Journal General Ledger Complete the payroll register for the December 15 pay period. (Round your intermediate computations and final answers to 2 decimal places.) 12/15/2019 Run Date Payroll End Date Company Name: Wayland Custom Woodworking Check Date 12/19/2019 12/15/2019 Name M/S # of W/H Hourly Rate No of Regular Hours No of Overtime Hours No of Holiday Hours Commissions Gross Earnings Insurance Taxable Wages 401(k) for Federal W/H $ 0.00 0.00 0.00 0.00 0.00 0.00 0.00 $ 0.00 Anthony Chinson Mark Wayland Sylvia Peppinico Stevon Varden Leonard Hissop Student F Success Taxable Wages for FICA $ 0.00 0.00 0.00 0.00 0.00 0.00 0.00 Totals 0.00 $ $ Name Gross Earning Net Pay Check No. Anthony Chinson Mark Wayland Sylvia Peppinico Stevon Varden Leonard Hissop Student F Success 0.00 Taxable Wages for Taxable Wages Federal W/H Federal W/H Social Security Tax Medicare W/H for FICA State W/H Tax $ 0.00 $ 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 $ 0.00 $ 0.00 $ 0.00 $ 0.00 $ 0.00 $ 0.00 174580 174581 174582 174583 174584 174585 Totals $ 0.00 $ 0.00

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Fundamentals of Cost Accounting

Authors: William Lanen, Shannon Anderson, Michael Maher

3rd Edition

9780078025525, 9780077517359, 77517350, 978-0077398194

More Books

Students also viewed these Accounting questions

Question

Technology. Refer to Case

Answered: 1 week ago