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 2016, 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% on the first $32,200. The state withholding rate is 5.0% for all income levels and marital statuses, which will be used in computing Utah withholding tax for each employee using the tax tables provided below. 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 all full time employees, both exempt and nonexempt. 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. Employees are paid for the following holidays occurring during the final quarter: Thanksgiving day and the day after, Thursday and Friday November 24-25 Christmas, which is a Sunday. When holidays occur on a weekend, the preceding Friday, December 23, is considered a holiday. Employees receive holiday pay for Monday, December 26. 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) $168.80 per allowance claimed Semimonthly Federal Percentage Method Tax Table Appendix C Page 254 Table #3 Federal Unemployment Rate (employer only) (less Section 125) 0.6% on the first $7,000 of wages State Withholding Rate (less 401(k), Section 125) See Utah Schedule 3, Table 1 or use the Excel Version of Schedule 3 State Unemployment Rate (employer only) (less Section 125) 2.6% on the first $32,200 of wages The balance sheet for WCW as of November 30, 2016, is as follows: Wayland Custom Woodworking Balance Sheet 11/30/2016 Assets Liabilities & Equity Cash $ 1,086,269.51 Accounts Payable $ 150,230.89 Supplies 10,283.15 Salaries and Wages Payable 10,319.19 Office Equipment 130,202.16 Federal Unemployment Tax Payable 1,920.92 Inventory 221,163.81 Social Security Tax Payable 3,219.22 Vehicle 25,000.00 Medicare Tax Payable 752.88 Accumulated Depreciation, Vehicle (1,420.00) Federal Unemployment Tax Payable 92.32 Building 164,000.00 State Unemployment Tax Payable 674.99 Accumulated Depreciation, Building (3,221.00) Employee State Income Tax Payable 1,088.86 Land 35,750.00 401(k) Contributions Payable 1,018.66 Total Assets 1,668,027.63 Employee Medical Premiums Payable 750.00 Notes Payable 211,000.00 Utilities Payable 2,825.43 Total Liabilities 383,893.36 Owners' Equity 1,250,000.00 Retained Earnings 34,134.27 Total Equity 1,284,134.27 Total Liabilities and Equity 1,668,027.63 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: 10/1/2016 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: 10/1/2016 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: 10/1/2016 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: 10/1/2016 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: 10/1/2016 Job title: Purchasing/Shipping SSN: 311-22-6698 00-Succe Student F Success Single, 1 withholding allowance 1650 South Street Nonexempt Logan, UT 84321 $36,000/year 435-556-1211 Start Date: 10/1/2016 Job title: Accounting Clerk SSN: 555-55-5555 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 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 F 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 7/16/2018, 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. For additional instructions on how to navigate and work through through Part 1 of this project, please download the student project guide here. rev: 01_11_2017_QC_CS-74391 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 15 December 15 is the end of the first pay period for the month of December. Employee pay will be disbursed on December 19, 2016. Remember that the employees are paid on a semimonthly basis. Compute the net pay and update the Employees' Earning Record 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, 2016. 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.