Question
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 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 |
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 |
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 |
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.
Required information Answer is not complete. Complete the question by filling in all answers in the tabs below. Employee Gross pay Payroll Register Chinson EERF Wayland EERF Peppinico EERF Cooper EERF Hissop EERF Success EERF General Journal General Ledger Run Date Payroll End Date 12/15/2020 12/15/2020 Company Name: Check Date Wayland Custom Woodworking 12/21/2020 Gross Name Filing Status Dependents Hourly Rate or Period Wage No. of Regular Hours No. of Overtime Hours No. of Holiday Hours Commissions 401(k) Insurance Earnings Taxable Wage for FICA 0. 0. Taxable Wages for Federal W/H 0.00 0.00 0.00 0.00 0.00 0.00 IS 0.00 Anthony Chinson Mark Wayland Sylvia Peppinico Stevon Cooper Leonard Hissop Student Success Totals 0. 0. 0. 0. 0.00 0.00 0.00 0.00 0. Name Gross Earnings Taxable Wages for FICA Federal W/H Social Security Tax Medicare W/H Net Pay Check No $ 0.00 Anthony Chinson Mark Wayland Sylvia Peppinico Stevon Cooper Leonard Hissop Student Success Totals Taxable Wages for Federal W/H 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 Total Deduction 0.00 0.00 0.00 0.00 0.00 0.00 0.00 4239 4240 4241 4242 4243 4244 0.00 $ 0.00 $ 0.00 0.00 $ 0.00 Required information Answer is not complete. Complete the question by filling in all answers in the tabs below. Employee Gross pay Payroll Register Chinson EERF Wayland EERF Peppinico EERF Cooper EERF Hissop EERF Success EERF General Journal General Ledger Run Date Payroll End Date 12/15/2020 12/15/2020 Company Name: Check Date Wayland Custom Woodworking 12/21/2020 Gross Name Filing Status Dependents Hourly Rate or Period Wage No. of Regular Hours No. of Overtime Hours No. of Holiday Hours Commissions 401(k) Insurance Earnings Taxable Wage for FICA 0. 0. Taxable Wages for Federal W/H 0.00 0.00 0.00 0.00 0.00 0.00 IS 0.00 Anthony Chinson Mark Wayland Sylvia Peppinico Stevon Cooper Leonard Hissop Student Success Totals 0. 0. 0. 0. 0.00 0.00 0.00 0.00 0. Name Gross Earnings Taxable Wages for FICA Federal W/H Social Security Tax Medicare W/H Net Pay Check No $ 0.00 Anthony Chinson Mark Wayland Sylvia Peppinico Stevon Cooper Leonard Hissop Student Success Totals Taxable Wages for Federal W/H 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 Total Deduction 0.00 0.00 0.00 0.00 0.00 0.00 0.00 4239 4240 4241 4242 4243 4244 0.00 $ 0.00 $ 0.00 0.00 $ 0.00
Step by Step Solution
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Step: 1
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