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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. Wayland’s EIN is 91-7444533 and his Utah Employer Account Number is 999-9290-1. Wayland has determined it will pay their employees on a semimonthly basis.
Students will complete the payroll for the final quarter of 2015, and will file fourth quarter and annual tax reports on the appropriate dates. When writing out the dollar amount for each check, spell out all words and the cents are presented over 100, for example 50 cents would be 50/100.
Federal income tax should be computed using the percentage method tables in Appendix C. FUTA information is in the table below. The Utah state income tax rate and the SUTA (UI) rate are in the table below.
Rounding can create a challenge. For these exercises, the rate for the individuals is not rounded. So take their salary and divide by 2,080 (52 weeks at 40 hours per week) for full time, nonexempt employees. For example, Varden’s 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. Exempt employees salaries are divided by 24 (number of payrolls for semimonthly.) For example, Chinson’s salary is $24,000 and is a full time employee, so the calculation will be $24,000/24, which would give you $1,000. After this hourly rate is determined, than it can be applied to the number of hours worked. After the gross pay has been calculated, round this number to only two decimal points prior to calculating taxes or other withholdings.
For the completion of this project the following information can be located in Appendix C. Students will use the Percentage method for federal income tax and the tax tables have been provided for Utah. Both 401(k) and insurance are pretax 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) | $166.70 per allowance claimed |
| Semimonthly Federal Percentage Method Tax Table | Appendix C, Page 270, Table #3 |
| Federal Unemployment Rate (Federal unemployment rate less Section 125 health insurance) | 6.0% on the first $7,000 of wages |
| State Withholding Rate (less 401(k), Section 125) | See Utah Schedule 3 |
| State Unemployment Rate (less Section 125) | 2.6% on the first $31,300 of wages |
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| Wayland Custom Woodworking Balance Sheet 9/30/2015 |
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| Assets | Liabilities & Equity | |||||
| Cash | $ | 1,125,000.00 | Accounts Payable | $ | 112,490.00 | |
| Supplies | 27,240.00 | Salaries and Wages Payable | ||||
| Office Equipment | 87,250.00 | Federal Unemployment Tax Payable | ||||
| Inventory | 123,000.00 | Social Security Tax Payable | ||||
| Vehicle | 25,000.00 | Medicare Tax Payable | ||||
| Accumulated Depreciation, Vehicle | State Unemployment Tax Payable | |||||
| Building | 164,000.00 | Employee Federal Income Tax Payable | ||||
| Accumulated Depreciation, Building | Employee State Income Tax Payable | |||||
| Land | 35,750.00 | 401(k) Contributions Payable | ||||
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Employee Medical Premiums Payable | ||||
| Total Assets | 1,587,240.00 | Notes Payable | 244,750.00 | |||
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Utilities Payable | ||||
| Total Liabilities | 337,240.00 | |||||
| Owners’ Equity | 1,250,000.00 | |||||
| Retained Earnings | ||||||
| Total Equity |
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1,250,000.00 |
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| Total Liabilities and Equity | 1,587,240.00 | |||||
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October 1:
Wayland Custom Woodworking (WCW) pays its employees according to their job classification. The following employees comprise Wayland’s staff:
| Employee Number | Name and Address | Payroll information |
| 00-Chins | Anthony Chinson 530 Sylvann Avenue Logan, UT 84321 435-555-1212 Job title: Account Executive |
Married, 1 withholding allowance Exempt $24,000/year + commission Start Date: 10/1/2015 SSN: 511-22-3333 |
| 00-Wayla | Mark Wayland 1570 Lovett Street Logan, UT 84321 435-555-1110 Job title: President/Owner |
Married, 5 withholding allowances Exempt $75,000/year Start Date: 10/1/2015 SSN: 505-33-1775 |
| 01-Peppi | Sylvia Peppinico 291 Antioch Road Logan, UT 84321 435-555-2244 Job title: Craftsman |
Married, 7 withholding allowances Exempt $43,500/year Start Date: 10/1/2015 SSN: 047-55-9951 |
| 01-Varde | Stevon Varden 333 Justin Drive Logan, UT 84321 435-555-9981 Job title: Craftsman |
Married, 2 withholding allowances Nonexempt $42,000/year Start Date: 10/1/2015 SSN: 022-66-1131 |
| 02-Hisso | Leonard Hissop 531 5th Street Logan, UT 84321 435-555-5858 Job title: Purchasing/Shipping |
Single, 4 withholding allowance Nonexempt $49,500/year Start Date: 10/1/2015 SSN: 311-22-6698 |
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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 | |
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The departments are as follows:
Department 00: Sales and Administration
Department 01: Factory workers
Department 02: Delivery and Customer service
1. You have been hired as of October 1 as the new accounting clerk. Your name is Student F. Success and your employee number is 00-STUDE. Your Utah drivers license is 887743 expiring in 7/2018 and social security number is 555-55-5555, and you are non-exempt and paid at a rate of $36,000 per year. Using the information provided, complete the W-4 and the I-9 to start your employee file. Complete as if Single with 1 withholding, you decide to contribute 3% to 401(k) and health insurance is $50 per pay period.
2. Complete the headers of the Employees’ Earnings Records for all company employees. Enter the YTD earnings for each employee.
rev: 03_30_2016_QC_CS-46759, 07_09_2016_QC_CS-52845, 07_13_2016_QC_CS-52845
21.42 points
December 15 is the end of the first pay period for the month of December. Employee pay will be disbursed on December 18. Any time worked in excess of 80 hours is considered overtime. Remember that the employees are paid on a semi-monthly basis. Compute the employee gross pay.
Compute the Net Pay for each employee using the payroll register. Once you have computed the net pay, complete the paycheck for each employee (assume that all employees are paid by check). Date the checks 12/18/1X (current year).
Complete the General Journal entries as follows:
3-Dec Journalize remittance of 401(k) and health insurance premiums deducted in November. (Refer to the general ledger for account balances.)
3-Dec Journalize remittance of monthly payroll taxes for November. (Refer to the general ledger for account balances.)
3-Dec Journalize payment of payroll to employees for November 30 payroll. (Refer to the general ledger for account balances.)
15-Dec Journalize employee pay including the issuance of paychecks (Use one entry for all checks)
15-Dec Journalize employer payroll tax for the December 15 pay date
18-Dec Journalize payment of payroll to employees
Update the Employee Earnings records for the period’s pay and the new YTD amount.
-NOTE 1: Do not round intermediate calculations and round hourly rate to 5 decimal places & remaining answers to 2 decimal places. If no entry is required for a transaction/event, select “No journal entry required” in the first account field.
-NOTE 2: When writing out the net amount of an employee’s check, be sure to write it in the correct format (e.g. Three Hundred Ninety-nine and 75/100 Dollars). Be sure to capitalize the letters as shown. Enter all dates in mm/dd/yy format where year is entered as 1X.
rev: 03_30_2016_QC_CS-46759, 04_25_2016_QC_CS-49952, 07_09_2016_QC_CS-52845
21.42 points
December 31 is the end of the final pay period for the month of December. Employee pay will be dispersed on January 3. The company pays for the day before and the day of Christmas, and if the holiday is on a weekend, the company pays for the Friday before. Christmas fell on a Tuesday, so employees will be paid for both the Monday and Tuesday as holiday pay. (Employees worked extra hours on Saturday during the week of 12/23-12/29. Remember, holidays and vacations do not incur overtime if the employee does not work more than 8 hours in a day.) Compute the employee gross pay.
Compute the Net Pay for each employee using the payroll register. Once you have computed the net pay, complete the paycheck for each employee (assume that all employees are paid by check). Date the checks 1/3/1X (next year).
Complete the General Journal entries as follows:
31-Dec Journalize employee pay including the issuance of paychecks (use one entry for all checks)
31-Dec Journalize employer payroll tax for the December 31 pay date
03-Jan Journalize remittance of 401(k) and health insurance premiums deducted
03-Jan Journalize remittance of monthly payroll taxes
03-Jan Journalize payment of payroll to employees
Update the Employee Earnings records for the period’s pay and the new YTD amount.
-NOTE 1: Do not round intermediate calculations and round hourly rate to 5 decimal places & remaining answers to 2 decimal places. If no entry is required for a transaction/event, select “No journal entry required” in the first account field.
-NOTE 2: When writing out the net amount of an employee’s check, be sure to write it in the correct format (e.g. Three Hundred Ninety-nine and 75/100 Dollars). Be sure to capitalize the letters as shown. Enter all dates in mm/dd/yy format where year is entered as 1X.
rev: 03_30_2016_QC_CS-46759, 07_09_2016_QC_CS-52845, 07_13_2016_QC_CS-52845
21.42 points
Complete the Employee Earning Record and YTD amount for the semimonthly pay.
-(NOTE): Do not round intermediate calculations and round your final answers to 2 decimal places.
rev: 03_30_2016_QC_CS-46759, 04_04_2016_QC_CS-46759, 07_09_2016_QC_CS-52845
21.42 points
Post all journal entries to the General Ledger accounts for the fourth quarter.
-(NOTE): Do not round intermediate calculations and round your final answers to 2 decimal places. Enter the transactions in order they were journalized.
rev: 03_30_2016_QC_CS-46759, 04_04_2016_QC_CS-46759, 07_09_2016_QC_CS-52845
21.42 points
Complete Form 941 for the remittance of quarterly federal taxes.
-THE FORMS BELOW ARE INTERACTIVE PRESENTATIONS OF OFFICIAL TAX FORMS, BUT ARE NOT OFFICIAL FORMS THEMSELVES. DO NOT USE THESE FORMS FOR ANY OTHER PURPOSE BESIDES EDUCATIONAL.
-(NOTE 2): Instructions on format can be found on certain cells within the forms. Do not round intermediate calculations and round your final answers to 2 decimal places.
rev: 03_30_2016_QC_CS-46759, 07_09_2016_QC_CS-52845
21.42 points
Complete Form 940 for Wayland Custom Woodworking.
-THE FORMS BELOW ARE INTERACTIVE PRESENTATIONS OF OFFICIAL TAX FORMS, BUT ARE NOT OFFICIAL FORMS THEMSELVES. DO NOT USE THESE FORMS FOR ANY OTHER PURPOSE BESIDES EDUCATIONAL.
-(NOTE 1): Instructions on format can be found on certain cells within the forms. Do not round intermediate calculations and round your final answers to 2 decimal places.
rev: 03_30_2016_QC_CS-46759, 07_09_2016_QC_CS-52845
21.48 points
Complete forms for the remittance of quarterly state taxes.
-THE FORMS BELOW ARE INTERACTIVE PRESENTATIONS OF OFFICIAL TAX FORMS, BUT ARE NOT OFFICIAL FORMS THEMSELVES. DO NOT USE THESE FORMS FOR ANY OTHER PURPOSE BESIDES EDUCATIONAL.
-(NOTE 1): Instructions on format can be found on certain cells within the forms. Do not round intermediate calculations and round your final answers to 2 decimal places.
rev: 03_30_2016_QC_CS-46759, 04_21_2016_QC_CS-49489, 07_13_2016_QC_CS-52845