Start of Short Version of Payroll Project
December 3 -
No. 18: Deposit with the state of Pennsylvania the amount of state income taxes with-held from the November 20 payroll and complete the information worksheet.
December 4 -
No. 19: Prepare the payroll for the first pay period of December from Time Clerk's Report Nos. 46 and 47, and record the paychecks issued all employees. Record this payroll at the top of the third payroll register sheet.
Note: Thursday, November 26, is a paid holiday for all workers. Also, record the employer's payroll taxes.
No. 20: Anthony V. Bonno reports the birth of a son and completes an amended Form W-4, showing his total withholding allowances to be five. Change his earnings record according, effective with the December 18 pay.
No. 21: Both Anthony Bonno and Norman Ryan have been notified that their union dues will increase to $9 per pay, starting with the last pay period of the year. Reflect these increases in the December 18 pay and show the changes on their earnings records.
December 9 -
No. 22: Pay the treasurer of the union the amount of union dues withheld during the month of November.
December 11 -
No. 23: The Payroll Department was informed that Virginia A. Russell died in an automobile accident on her way home from work Thursday, December 10.
December 14 -
No. 24: Make a separate entry on one line) in the payroll register to record the issuance of a check payable to the Estate of Virginia A. Russell. This check covers Russell's work for the weeks ending December 5 and 12 $1,134.00) plus her accrued vacation pay ($1,260.00). Do not show the vacation hours in the Time Record columns on the payroll register, but include them in the Total Earnings column.
Russell's final biweekly pay for time worked and the vacation pay are subject to FICA, FUTA, and SUTA (employer and employee) taxes. Since Russell's cumulative earnings have surpassed the taxable earnings figures established by FUTA and SUTA, there will not be any unemployment tax on the employer. The deduction for group insurance premiums is $14.70.
Make a notation of Russell's death in the payroll register and on her earnings record.
Prepare journal entries to transfer the net pay and to record Russell's final pay and the employer's payroll taxes. Post to the ledger accounts.
No. 23: The Payroll Department was informed that Virginia A. Russell died in an automobile accident on her way home from work Thursday, December 10.
December 14 -
No. 24: Make a separate entry (on one line) in the payroll register to record the issuance of a check payable to the Estate of Virginia A. Russell. This check covers Russell's work for the weeks ending December 5 and 12 ($1,134.00) plus her accrued vacation pay ($1,260.00). Do not show the vacation hours in the Time Record columns on the payroll register, but include them in the Total Earnings column.
Russell's final biweekly pay for time worked and the vacation pay are subject to FICA, FUTA, and SUTA (employer and employee) taxes. Since Russell's cumulative earnings have surpassed the taxable earnings figures established by FUTA and SUTA, there will not be any unemployment tax on the employer. The deduction for group insurance premiums is $14.70.
Make a notation of Russell's death in the payroll register and on her earnings record.
Prepare journal entries to transfer the net pay and to record Russell's final pay and the employer's payroll taxes. Post to the ledger accounts.
Include the final gross pay ($2,394.00) in Boxes 3 and 5, but not in Boxes 1, 16, and 18. Use the blank Form W-2 on page 7-60.
In addition, the last wage payment and vacation pay must be reported on Form 1099-M1SC. A Form 1096 must also be completed. These forms will be completed in February before their due date. (See Transaction Nos. 41 and 42 on page 7-67.)
December 15 -
No. 25: Electronically deposit the amount of FICA taxes and federal income taxes for the November payrolls and complete the Federal Deposit Information Worksheet.
No. 26: Deposit with the city of Philadelphia the amount of city income taxes withheld from the November payrolls.
December 18 -
No. 27: Deposit with the state of Pennsylvania the amount of state income taxes withheld from the December 4 payroll and complete the information worksheet.
No. 28: Glo-Brite has been notified by the insurance company that there will be no premium charge for the month of December on the policy for Virginia Russell. Prepare the entry for the check made payable to the estate Of Virginia A. Russell, for the amount that was withheld for insurance from her December 14 pay.
No. 29: Prepare an employee's earnings record for Richard Lloyd Zimmerman, who was employed today as time clerk to take the place left vacant by the death of Virginia A. Russell last week. His beginning salary is $2,600 per month. Address, 900 South Clark Street, Philadelphia, PA 19195¬6 Telephone, 555-2104. Social Security No. 000-00-1502. Zimmer-man is married and claims one withholding allowance. Zimmerman is eligible for group insurance coverage of $47,000, although no deduction for group insurance premiums will he made until the last payday in January.
Department: Office
Weekly rate: $600.00
Hourly rate: $15.00
No. 30: Prepare the payroll for the latter pay of December from Time Clerk's Report Nos. 48 and 49 and record the paychecks issued all employees. Also, record the employer's payroll taxes.
Effective with this pay, O'Neill completed a new Form W-4, changing his total withholding allowances to four. Previously, he had claimed fewer allowances than he had been using on his tax return. Change his earnings record accordingly.
In this pay, the president of the company, Joseph O'Neill, is paid his annual bonus. This does not affect O'Neill's insurance coverage, which is based on regular pay. This year, his bonus is $75,000. For withholding purposes, the bonus is considered a supplemental payment and is added to his gross pay, and the aggregate amount is taxed. For this pay, O'Neill has increased his SIMPLE deduction to $4,000. To determine the federal income tax, use the Table of Allowance Values along with Tax Table A (pages T-2 to T-4). In calculating the tax, do not round the aggregate to the nearest earnings dollar. In this pay, O'Neill has reached the OASDI ceiling. To calculate O'Neill's OASDI tax, multiply the OASDI ceiling of $118,500 by 6.2 percent and then subtract the year-to-date OASDI taxes withheld up to this pay.
Note: After posting the information for this last pay to the employees' earnings records, calculate and enter the quarterly and yearly totals on each earnings record.
Note: This completes the project insofar as recording the payroll transactions for the last quarter is concerned. The following additional transactions are given to illustrate different types of transactions arising in connection with the accounting for payrolls and payroll taxes. Record these transactions in the journal, but do not post to the ledger.
January 6 -
No. 31: Deposit with the state of Pennsylvania the amount of state income taxes withheld from the December 18 payroll and complete the information worksheet.
January 8 -
No. 32: Pay the treasurer of the union the amount of union dues withheld during the month of December.
January 15 -
No. 33: Electronically deposit the amount of FICA taxes and federal income taxes for the December payrolls, and complete the Federal Deposit information Worksheet.
No. 34: Deposit with the city of Philadelphia the amount of city income taxes withheld from the December payrolls.
Note: This completes the project insofar as recording the payroll transactions for the last quarter is concerned. The following additional transactions are given to illustrate different types of transactions arising in connection with the accounting for payrolls and payroll taxes. Record these transactions in the journal, but do not post to the ledger.
January 6 -
No. 31: Deposit with the state of Pennsylvania the amount of state income taxes withheld from the December 18 payroll and complete the information worksheet.
January 8 -
No. 32: Pay the treasurer of the union the amount of union dues withheld during the month of December.
January 15 -
No. 33: Electronically deposit the amount of FICA taxes and federal income taxes for the December payrolls, and complete the Federal Deposit Information Worksheet.
No. 34: Deposit with the city of Philadelphia the amount of city income taxes withheld from the December payrolls.
February 1 -
No. 35: Prepare Form 941, Employer's Quarterly Federal Tax Return, with respect to wages paid during the last calendar quarter. Pages 7-55 and 7-56 contain a blank Form 941. The information needed in preparing the return should be obtained from the ledger accounts, payroll registers, employees' earnings records, and Federal Tax Deposit forms.
Form 941 and all forms that follow are to be signed by the president of the company, Joseph T. O'Neill.
No. 36: Complete Form 940, Employer's Federal Unemployment (FUTA) Tax Return, using the blank forms reproduced on pages 7-57 and 7-58. Also, complete the Federal Deposit Information Worksheet, using the blank form reproduced on page 7-50.
a. Total wages for the first three quarters was $142,224.57. FUTA taxable wages for the first three quarters was $65,490.00.
b. FUTA tax liability, by quarter:
1st quarter-$204.53
2nd quarter $105.25
3rd quarter-$83.16
The first FUTA deposit is now due.
c. Journalize the entry to record the electronic deposit for the FUTA tax liability.
No. 37: Prepare Form UC-2, Employer's Report for Unemployment Compensation-Fourth Quarter, using the blank form reproduced on page 7-59. In Pennsylvania, a credit week is any calendar week during the quarter in which the employee earned at least $50 (without regard to when paid). The maximum number of credit weeks in a quarter is 13. The telephone number of the company is (215) 555-9559. All other information needed in preparing the form can be obtained from the ledger accounts, the payroll registers, and the employees' earnings records.
Journalize the entry to record the payment of the taxes for the fourth quarter.
No. 38: Complete Form W-2, Wage and Tax Statement, for each current employee, using the blank statements reproduced on pages 7-61 to 7-65. Use each employee's earnings record to obtain the information needed to complete the forms. The two plant workers (Bonno and Ryan) have had $121.00 in union dues withheld during the year.
No. 39: Complete Form W-3, Transmittal of Wage and Tax Statements, using the Hank form reproduced on page 7-66. Use the information on all Forms W-2 to complete this form.
No. 40: Complete Pennsylvania Form REV-1667, W-2 Transmittal using the blank form reproduced on page 7-66. Use the information on Forms W-2 to complete this report. The wages paid and the Pennsylvania tax withheld for the first three quarters are:
1st $34,088.75 $1,046.52
2nd $45,535.62 $1,397.94
3rd $62,600.20 $1,921.83
No. 41: Complete Form 1099-MISC, Miscellaneous Income, for the payment to the estate of Virginia A. Russell. The full amount of the December 14 payment must be reported in Box 3. Page 7-67 contains a blank form.
Note: These wages are to be reported as other income in Box 3 so that the IRS will not seek self-employment tax on such amounts.
No. 42: Complete Form 1096, Annual Summa iy and Transmittal of U.S. Information Returns, using the blank form on page 7-67. Use the information on Form 1099-MISC to complete this form.
No. 43: Pennsylvania's Quarterly Reconciliation of Income Tax Withheld is filed electronically. The information worksheet to be completed is on page 7-53. The telephone number of the company is (215) 555-9559.
No. 44: Prepare the Annual Reconciliation of Employer Wage Tax for Philadelphia, using the blank form on page 7-54. For lines 1, 3, and 4, use gross wages and salaries per general ledger less exempt wages paid to Russell ($2,394.00) on December 14. (This amount should agree with Form W-3 Box 18, local wages.) Tax paid during the first three quarters was $5,57 5.21. For reporting purposes, there were 10 Philadelphia residents for whom wage tax was remitted for the pay period ending March 12, 20--.
Attachment:- Assignment Files.rar