Payroll Accounting 2024 10th International Edition Jeanette Landin, Paulette Schirmer - Solutions

LO 6-2 Discuss Reporting Periods and Requirements for Employer Tax Deposits?
LO 6-3 Prepare Mid-Year and Year-End Employer Tax Reporting and Deposits?
LO 6-4 Describe Payroll within the Context of Business Expenses?
LO 6-5 Relate Labor Expenses to Company Profitability?
LO 6-6 Complete Benefit Analysis as a Function of Payroll?
1. AMS Enterprises in New Mexico has 30 employees. Of these, 25 have exceeded the FUTA and SUTA wage bases. This is the first quarter of the year, and AMS Enterprises has not yet paid FUTA or SUTA taxes for the year.The other five employees’ YTD wages are as follows: Employee A, $15,800;Employee
2. Noodle Noggins of Maine has 12 employees and is eligible for the full FUTA tax credit; the SUTA rate is 3.26 percent. Ten of the 12 employees have exceeded the FUTA wage base. Eight employees have exceeded the SUTA wage base (see Table 6-2 for the SUTA taxable wage maximum).The remaining
3. High Flyers Jump School has two classifications of employees: clerical employees and jump instructors. The workers’ compensation premium rates are $0.45/$100 for clerical employees and $3.75/$100 for jump instructors. During 20XX, the estimated payroll amounts were $104,550 for clerical
1. Perry Plastics had $46,986 in payroll taxes during the lookback period.How often must the company deposit its payroll taxes?
2. For Perry Plastics, when is the deposit for June payroll taxes due?
3. Charlie’s Kitchens has a payroll tax liability of $126,463 on its Friday payroll.When is the payroll tax deposit due?
1. Jacobucci Enterprises is a monthly schedule depositor. According to the information it reported on Form 941, its quarterly tax liability is $8,462.96. During the quarter, it made deposits of $2,980.24 and $3,068.24. How much must it remit with its tax return?
2. Cary’s Corrals paid annual wages totaling $278,452.76 to 15 employees.Assuming that all employees were employed for the entire year, what is the amount of FUTA wages?
3. For Cary’s Corrals in the previous question, what is the FUTA tax liability?
4. Skyrockets, Inc., had the following wage information reported in box 1 of its W-2s:Employee A: $25,650 Employee B: $30,025 Employee C: $28,550 Employee D: $31,970 What amount must it report as total wages on its Form W-3?
1. What are the two types of penalties associated with payroll taxes?
2. How do payroll expenses relate to other business functions?
1. Pine Banks Tree Farms has 10 employees on staff: three office staff, five agricultural workers, and two drivers. The annual payroll expense is $300,000.a. What would be the labor distribution if Pine Banks Tree Farms uses departmental classification?b. What would be the labor distribution if
2. Which method—departmental classification or non-departmental classification—is most appropriate? Why?
1. What are the purposes of compiling a benefit analysis report?
2. What is the difference between a benefit analysis report and an annual total compensation report?
1. What taxes are paid only by the employer in most states?
3. What taxes are paid by the employee only?
5. How often must a company report Form 941 earnings/withholdings?
7. Which of the mandatory taxes have a maximum wage base?
9. What is the purpose of Form 941?
10. Which employers must use Schedule B?
11. How do employers know that they must use Form 944?
12. What is the purpose of Form 940?
13. What are three ways employers could reduce their SUTA tax liability?
14. What is the difference between Form W-2 and Form W-3?
15. What are the employer’s payroll responsibilities as far as taxes and other withholdings are concerned?
16. How does payroll relate to a company’s costs of doing business?
17. What is meant by the term labor distribution?
18. How do payroll records inform managers about labor distribution?
19. What is a benefit analysis report?
20. How can a manager use the benefit analysis report in the decision-making process?
21. How do the payroll reports inform managers about department and company profitability?
22. How do total compensation reports assist employers with hiring and retention?
LO 6-1 Which of the following are always employer-only payroll obligations?(Select all that apply.)a. Social Security taxb. SUTAc. Employee income taxd. FUTA
LO 6-1 As of 2023, which of the following accurately represents the full FUTA rate and wage base?a. 0.6 percent, $160,200b. Varies by statec. 6.0 percent, $7,000d. 0.6 percent, $7,000
LO 6-1 Dylan Reyes is the accountant for Heads Up Hat Corporation. In preparing the payroll for the semimonthly pay period ending December 15, Dylan notices that some of the year-to-date executives’ salaries have exceeded $200,000. What payroll tax responsibilities does Heads Up Hat Corporation
LO 6-3 Which form(s) should be prepared and filed by companies with employees and payroll tax liabilities exceeding $50,000 as of December 31, 20XX?(Select all that apply.)a. Form 940b. Form W-4c. Form 941d. Form W-2
LO 6-4 Gold Star Printing made its required tax deposits. However, it filed its thirdquarter Form 941 on December 10, after receiving a written notice from the IRS regarding the missing form. What is the failure to file penalty for Gold Star Printing?a. 2 percentb. 5 percentc. 10 percentd. 15
LO 6-4, 6-5 Which of the following is true about the cost of employees within a business context? (Select all that apply.)a. Employees constitute a high cost of conducting business.b. Hiring employees involves a significant overhead cost.c. Costs associated with employees include only salary and
LO 6-6 Which of the following represents the purpose(s) of the benefit analysis report? (Select all that apply.)a. Benchmarking with other companiesb. Understanding of employer and employee benefits costsc. Billing employees for benefits costsd. Identification of opportunities for increasing
LO 6-6 Why is it important to prepare the benefit analysis report or the total compensation report? (Select all that apply.)a. The reports promote employee education about the total value of their salary and benefits.b. The reports inform labor planning and employer cost strategies.c. The reports
LO 6-1, 6-4 Which of the following is a characteristic of workers’ compensation? (Select all that apply.)a. Workers’ compensation is an insurance policy.b. Private employers are federally mandated to provide workers’compensation.c. The cost of workers’ compensation represents a labor
LO 6-1 River Signorini works for New & Old Apparel, which pays employees on a semimonthly basis. River’s annual salary is $184,000. Calculate the following: Pay Date October 13 December 29 Prior YTD Earnings Social Security Taxable Wages Medicare Taxable Wages Employer Share Social Security
LO 6-1, 6-3 White Lemon Cameras has the following employees: Employee Name M. Haskell V. Papadopoulos P. Anderson C. Billingmeier C. Johnson Annual Taxable Wages $26,000 35,000 32,000 29,000 46,000 White Lemon Cameras's SUTA tax rate is 5.4 percent and applies to the first $8,000 of employee wages.
Using the information from P6-4A, compute the employer’s share of the taxes. The FUTA rate in Kentucky for 2023 is 0.6 percent on the first$7,000 of employee wages, and the SUTA rate is 5.4 percent with a wage base of $11,100.Federal income tax withholding: _____ Social Security tax: _____
Using the information from P6-6A and P6-7A for Veryclear Glassware (California Employer Account Number 999-9999-9), complete the following State of California Form DE-9, Quarterly Contribution, and Report of Wages. Use 5.4 percent as the UI rate with a cap of $7,000 per employee, 0.1 percent as the
LO 6-3 The Content Rabbit Graphics Company paid its 25 employees a total of$863,428.49 in 2022. Of these wages, $9,850 is exempt from retirement benefits (employer contributions to 401(k) plans). All employees have worked there for the full calendar year and reached the FUTA wage base during the
LO 6-3 Leda, Inc., is located at 433 Augusta Road, Caribou, Maine, 04736, phone number 207-555-1212. The Federal EIN is 54-3910394, and it has a Maine Revenue Services number of 3884019. Owner Kieran Leda has asked you to prepare Form W-2 for each of the following employees of Leda, Inc., as of
LO 6-3 Using the information from P6-10A for Leda, Inc., completed Form W-3 must accompany the company’s W-2 forms. Leda, Inc., is a 941 payer and is a private, for-profit company. Kieran Leda is the owner; the phone number is 207-555-1212; no email address to disclose; the fax number is
LO 6-4, 6-6 Park Mischner owns Old Times Buttons, which employs 20 people. Park wants to perform a benefits analysis report for one of the employees, Avery Bower, for the year. Avery’s benefits package is as follows:Annual salary: $35,650 401(k) contribution: 6 percent of annual salary. The
LO 6-4, 6-5 Snow Mountain Equipment has 24 employees distributed among the following departments:Sales: 5 Factory: 12 Administration: 7 The total annual payroll for Snow Mountain Equipment is $846,000.Compute the labor distribution based on an equal distribution among the departments.Sales: _____
LO 6-4, 6-5 For Snow Mountain Equipment in P6-13A, compute the labor distribution based on the number of employees per department:Sales: _____ Factory: _____ Administration: _____
LO 6-1, 6-4 Small Orange Fine Foods is a specialty grocery store. The employees are classified according to job titles for workers’ compensation insurance premium computation purposes.a. Based on the payroll estimates as of January 1, what is the total estimated workers’ compensation premium
LO 6-1 Of the following taxes, which one(s) is/are examples of mandatory and voluntary employee deductions? (Select all that apply.)a. Social Security taxb. Employee federal income taxc. FUTAd. 401(k) contributions
LO 6-1 Which of the following is/are true about FUTA obligations? (Select all that apply.)a. FUTA is an employer-only tax.b. FUTA is subject to a 5.4 percent reduction based on employer and state factors.c. FUTA is subject to a $20,000 wage base per employee.d. FUTA applies to all companies.
LO 6-1 Of the IRS-stipulated lookback periods, which one(s) is/are the most commonly used? (Select all that apply.)a. Monthlyb. Semiweeklyc. Next business dayd. Annually
LO 6-2 The Putney Youth Theater has annual payroll taxes of $3,564 during the most recent lookback period. Which payroll deposit frequency will the company have, based on that lookback period?a. Quarterlyb. Monthlyc. Semiweeklyd. Annually
LO 6-3 Shay Kinderton is a new payroll accountant with Sal’s Diamond Mart, Inc., in New York, NY. The company had a payroll tax liability of $49,580 during the most recent lookback period. For the quarter ending September 30, 2023, which federal form should be filed to remit payroll taxes?
LO 6-3 Which of the following is a form that must accompany all Forms W-2 submitted to the Social Security Administration?a. Form 941b. Form 940c. Form W-3d. Form W-4
LO 6-4 What are the penalties associated with the lack of reporting and remitting payroll taxes? (Select all that apply.)a. Failure to reportb. Failure to filec. Failure to depositd. Failure to remit
LO 6-4 Rory Briggs is the accounting supervisor for Cheeky Cat Furnishings, which has chosen to maintain its payroll on an in-house basis. For this purpose, they have hired new accounting clerks. Which of the following are the payroll responsibilities of Cheeky Cat Furnishings? (Select all that
LO 6-5 Which of the following represents the difference between the benefit analysis report and the annual total compensation report? (Select all that apply.)a. The benefit analysis report is designed for review by company managers.b. The annual total compensation report’s intended audience is
LO 6-5 Which of the following represents the purpose(s) of the labor distribution report? (Select all that apply.)a. Accurate payroll cost allocation among departmentsb. Explanation of individual employee costsc. Evaluation of labor planning effortsd. Determination of departmental performance
LO 6-1, 6-4 Sunny Day Flooring has employees in its manufacturing, sales, and administrative departments. Which department will have the highest rate for its workers’ compensation insurance?a. Manufacturingb. Salesc. Administratived. All departments will have the same rate.
LO 6-1 Campbell Whitman works for Schaum, Whitney, & Matte, LLP, in Washington, DC, which pays employees on a biweekly basis. Campbell’s annual salary is$170,000. The company began operations in 2023. Calculate the following: Pay Period End September 22 December 29 Prior YTD Earnings Social
LO 6-1, 6-3 Mi Casa Restaurants of Las Cruces, New Mexico, has the following employees as of December 31. The SUTA rate for Mi Casa is 4.3 percent and the cap is $30,100 per employee. Compute the FUTA and SUTA taxes for each employee.Employee Name Annual Taxable Wages A. Shelby $48,120 M. Gomez
LO 6-1, 6-2, 6-3 Deep Mouse Designs has 22 employees within Denver City and County.The employees earned $13.65 per hour and worked 160 hours each during the month. The employer must remit $4.00 per month per employee who earns more than $500 per month. Additionally, employees who earn more than
LO 6-1, 6-2, 6-3 Journey Clark earned $55,875 in 2023 for Weather Gurus in Concord, New Hampshire. Weather Gurus’ SUTA rate is 2.3 percent and has a wage base of $14,000 during 2023. The FUTA rate is 0.6 percent. Compute Weather Gurus’ share of Journey’s annual salary.Social Security
LO 6-2, 6-3 Storm Murphy is the owner of Stormy Banana Films in West Hollywood, California. Stormy Banana Films had 15 employees with total annual wages of $214,750 in 2023 (no one exceeded the Medicare tax surcharge or Social Security cap). The FUTA rate for California in 2023 is 0.6
LO 6-1 Peaceful Cat Pet Foods is a new business owned by Wren Hammond. The first year of operations commenced on January 1, 2023. What schedule depositor would the company be for the first year of operations? Why?
LO 6-3 Using the information from P6-6B, complete the following form 941 for the first quarter of 2023. The form was signed by the owner on April 11, 2023.EIN: 98-0050036 Address: 1021 Old Plainfield Road, Salina, California, 95670 Phone: 707-555-0303 Number of employees: 8 Wages, tips, and other
LO 6-3 Using the information from P6-6B and P6-7B for Peaceful Cat Pet Foods, complete the following State of California Form DE-9, Quarterly Contribution Return and Report of Wages. The California employer account number is 989-8877-1. Use 5.4 percent as the UI rate, 0.1 percent as the ETT rate,
LO 6-3 Jealous Frog Toys paid its nine employees a total of $432,586.40 in 2022. All employees have worked there for the full calendar year and reached the FUTA wage base during the first quarter. Taxes were deposited on time. The employer contributed $12,470 to retirement plans during the year
LO 6-3 Reese Castor, the owner of Castor Corporation, is located at 1310 Garrick Way, Sun Valley, Arizona, 86029, phone number is 928-555-8842. The federal EIN is 20-1948348, and the state employer identification number is 9040-2038-1. Prepare the Form W-2 for each of the following employees of
LO 6-3 Using the information from P6-10B for Castor Corporation, complete Form W-3, which must accompany the company’s Form W-2s. Castor Corporation is a 941 payer and is a private, for-profit company. No third-party sick pay was applied for 2023. The W-3 was signed and submitted on January 12,
LO 6-5, 6-6 Oak Cove Resorts has eight employees. The owner wants to perform a benefit analysis report for the year for one of its employees, Tristan Cassidy. Tristan’s benefits package is as follows:Annual salary: $42,950 401(k) contribution: 8 percent of annual salary; the company match is half
LO 6-4, 6-5 Superfan Sportsgear has 30 employees distributed among the following departments:Sales: 7 Factory: 13 Administration: 10 The total annual payroll for Superfan Sportsgear is $975,580.Compute the labor distribution based on the equal distribution among the departments.Sales: _____
LO 6-4, 6-5 For Superfan Sportsgear in P6-13B, compute the labor distribution based on the number of employees per department:Sales: _____ Factory: _____ Administration: _____
LO 6-1, 6-4 At Fox Furniture, employees are classified according to the job title for workers’ compensation insurance premium computation purposes.a. Based on the following payroll estimates as of January 1, what is the estimated workers’ compensation insurance premium for the year 2023?b. The
6-1. Burton Book Memorabilia is a semiweekly depositor. Following a special project’s success, Keller Burton, the owner, pays each of the 250 employees a $2,000 bonus on August 11, 2023. Assume a 22 percent income tax rate. When will Keller need to deposit the payroll taxes?
6-2. Go to https://www.firstnonprofit.com/suta-state-unemployment-tax-2023-cost-changes and check out the unemployment tax rates for your state.
6-3. Want to know more about the concepts in this chapter? Go to one or more of the following sites. What are two or three things you notice about the information on the site?www.smallbusiness.chron.com/example-employee-compensation-plan-10068.xhtml
6-4. Check out the employer payroll tax estimation tool at https://gusto.com/tools/employer-tax-calculator
6-5. Would you like to explore specific topics about being an employer in more depth?Check out https://www.employer.gov/
1. How do the employees’ earnings records relate to the payroll register?
2. Which of the following fields exist in both the payroll register and the employees’ earnings records?a. Nameb. Pay ratec. Job titled. Net paye. Address
3. What reports and forms use information from the employees’ earnings records?
1. What is the fundamental accounting equation?
2. What increases the Wages and Salaries Payable account: a debit or a credit?
3. What increases the Wages and Salaries Expense account: a debit or a credit?
1. In the following General Journal entry, which account represents the employees’ gross pay?Description Debit Credit Wages and Salaries Expense $124,785.00 Federal Income Tax Payable $15,280.00 Social Security Tax Payable 7,736.67 Medicare Tax Payable 1,809.38 State Income Tax Payable 4,741.83
2. Based on the preceding General Journal entry, what would be the entry for the employer’s share of the payroll taxes? Omit FUTA/SUTA taxes.
3. Lilac’s Craft Warehouse has created a journal entry to accrue the payroll to be paid out in the following period. The accrual amounts are as follows:Wages and Salaries Expense $42,795.00 Federal Income Tax Payable $6,234.00 Social Security Tax Payable 2,653.29 Medicare Tax Payable 620.53 State
1. The Medicare Tax Payable account for Gulf Coast Shrimp had a credit balance on June 23 of $2,540. As of the June 30 payroll, credits totaling$220 were posted to the Medicare Tax Payable account. What is the balance in the account as of June 30?

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Payroll Accounting 2024 10th International Edition Jeanette Landin, Paulette Schirmer - Solutions

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