226 Payroll Accounting Chapter 7:Comprehensive Projects-Pap One-Month Project NOTE! Templates needed to complete these exercises are included in the Student Exercise Files for this course. Ellipses Corp. is a small business that operates in Herndon, VA. The company is located at 10 Period Lane Herndon, VA 20170. Its federal Employer Identification Number is 77-7777777, and its president, who signs all tax forms, is John Parker (telephone #571-555-0073) The company does not wish to name a third-party designee on forms. During 2017 four individuals are employed by Ellipses Corp. These employees are as follows. Federal WH State W/HMarital Allowances Allowances Status Married Social security # Address Name Parker Cranston 85 Southern Road Herndon, VA 20170 Married 777-77-77774 Allison Harrison 203A Pine Court Herndon, VA 20170 Single 444-44-4444 John Parker 212 Tradition Lane Herndon, VA 20170 Married 333-33-3333 2 Pierre Sternberg 41 Seward Boulevard Herndon, VA 20170 Note that Pierre Sternberg was hired in November, and his first day of work was Monday, November 27 Additionally, due to an economic downturn, Allison Harrison was laid off in mid-December, with her last day of work on Friday, December 15. All employees of Ellipses Corp. work a regular 40-hour workweek (thus all hours worked over 40 in a given week are overtime hours), receive overtime pay at a rate of 1.5 times the regular wage rate, and are paid weekdy on Friday for the current week (which runs from Saturday through Friday, although employees never work on weekends). The SUTA tax rate applicable to Ellipses Corp. is 3.1%, while the SUTA wage base in Virginia is $8,000 Earnings and voluntary deduction information for each of the four employees is as follows. Regular wage Rate Salary Annual Weekly 401(k) Weekly Charitable Name Deduction Contribution $5 Iss Parker Cranston $15/hour N/A N/A 203,00020 N/A $112,000.20 | 1%of gross pay 6% of gross pay Allison Harrison$23/hou John Parker Pierre Sternberg N/A % of gross pay N/A $20 | N/A One-Mionth Project 227 11 months of the year have passed, and all payroll-related n2017.Paroll data for each of the four employees for the first three quarters activity has been properly accounted for as of of the year, as well as for the of October and November, is as follows. Parker Cranston Federal State riod Earnings Income Tax Income Tax Security Tax Tax Medicare 401(k) Charitable pe 1st quarter $7,800 2nd quarter $7,800 Deduction Cont $312 $312 3rd quarter$7,800$312 S96 S96 $366.60 $483.60 $483.60 $483.60 $148.80 $148.80 $113.10 $468 $113.10 $468 113.10 $468 34.80 $144 $34.80$144 $366.60 $65 $65 $20 $20 $2,400 $112.80 November $2,400 $112.80 Allison Harrison Gross Earnings Income Tax Income Tax Security Tax Tax Federal State Medicare 401(k Charitable Period 1st quarter$11,960 $546 2nd quarter $11,960 $546 rd quarter $11,960 S546 October November $3,680 $168 Deduction Cont. $568.10 $568.10 $568.10 $174.80 $174.80 $741.52 $741.52 $741.52 $228.16 $228.16 $173.42 $598 $173.42 $598 $173.42 $598 $53.36$184 $53.36 $184 $65 $3,680 $168 $20 John Parker Charitable Medicare 401(k) State Federal Gross Period Earnings Income Tax Income Tax Security Tax Tax 1st quarter s50,750.0s $12,073.10 $2,537.47 $3,146.52 nd quarter 50,750.05 $12,073.10$2,537.47 $3,146.52 $735.93 so 3rd quarter $50,750.05 $12,073.10$2,537.47 $1,593.36 $735.93 s October $15,615.40 $3,714.80 November $15,615.40 $3,714.80 $780.76 Deduction Cont $260 $260 $260 $80 $80 $735.93 $0 $226.44 so $780.76 s $226.44$0 228Palunting Chaper 7 Camrehensve-Paper Based versknis Pierre Stemberg 401(k) Charitable Deduction Cont Medicare Social state Federal Gross so Period Ea tst quarter $0 and quarter so ard quarter $0 rmings income Tax income Tax Security Tax Tax s0 so s0 $0 so $0 so so $31.23 SO $0 October $0 November $2,153.85$288.68 Note that all tax payments and flings are made on the due date. Based on the data provided here, you wil 21.54So $133.54 $106.62 complete the following Establish an employee earnings record for each of the company's four employees. Complete the top portion of each record 2. Establish and complete the payroll register for each weekly pay period during December. When calculating tax withholding, use the withholding tables where possible, and refer to the percentage method only when necessary Note that as of December 2, Parker Cranston requests that his federal withholding allowances increase from two to three (Elipses Corp. makes this change). Additionally, for simplicity, calculate the state income tax withholding as 5% of each employee's taxable pay (which same as taxable pay for FWT). Recall that state income tax withholding would ordinarily be calculated using the applicable state's withholding tables. Payroll checks are remitted to the employees in the same order Cranston, Harrison, Parker, Stermberg) each pay period and are written from a bank account that is used solely for these payments. The first payroll check written in December is check #762. Note that all charitable contributions are deemed to be made on the final day of each pay period. The following information will be required for the completion of these records for the two employees who are compensated via an hourly wage Weekly Hours Worked Weekly Start Date November 25 December 2 December9 December 16 December 23 Parker Cranston Allison Harrison 40 38 43.5 40 37 41 WARNING! The above dates are weekly start dates Refer to a calendar to determine the weky end dates and associated pay dates. keep in mind that tax liability and payment amounts are determined based on the weekly pay dates 3. Complete the employee earnings records for December for each of the four employees., Divide the voluntary records. If directed to do so by your instructor, record the necessary journal entries for each pay period deductions from the payroll register appropriately across the associated columns within the employee earning Three-Month Project 229 ,Complete Form 941 for the 4th quarter. Note that based on the lookback period, the company is a monthly sitor. Assume that all necessary deposits were made on a timely basis and that the employer made deposits equal to the total amount owed for the quarter. Although Virginia quarterly state payrol ors are depositor.A also filed by Ellipses Corp. you will not complete these. If directed to do so by your instructor, NOTE! essary journal entries associated with Form 941 (including those required for any tax payments made) record the Recall from the Form 941 Rounding Considerations section that quarter- and year-end tax figures should not be calculated based on the total taxable earnings for the respective quarter or year Instead, to avoid rounding discrepancies, tax figures within Part 2 of Form 941 should be determined for each employee by adding the individual taxes across each pay period. Complete Form 940 for Ellipses Corp. Note that FUTA payments are made only when required (ie , if the employer is permitted to postpone the payment of these taxes, it will do so untl a point in time when payment must be remitted). If directed to do so by your instructor, record the necessary journal entry associated with Form 940. 5 6. Calculate total SUTA tax owed by the employer. Although Ellipses Corp. will fle state forms in which this figure is reported, you are required to calculate only the total amount owed for the year. subject to federal withholding tax for each of the four employees, and the state identification number for Ellipses Corp. is the same as its federal Employer Identification Number. 7. Complete Copy A of Form W-2 for each of the four employees.State wages were the same as federal wages 8. Complete Form W.3 for Ellipses Corp. Note that the company files the paper version of the form and selects None apply" in the Kind of Employer section. 226 Payroll Accounting Chapter 7:Comprehensive Projects-Pap One-Month Project NOTE! Templates needed to complete these exercises are included in the Student Exercise Files for this course. Ellipses Corp. is a small business that operates in Herndon, VA. The company is located at 10 Period Lane Herndon, VA 20170. Its federal Employer Identification Number is 77-7777777, and its president, who signs all tax forms, is John Parker (telephone #571-555-0073) The company does not wish to name a third-party designee on forms. During 2017 four individuals are employed by Ellipses Corp. These employees are as follows. Federal WH State W/HMarital Allowances Allowances Status Married Social security # Address Name Parker Cranston 85 Southern Road Herndon, VA 20170 Married 777-77-77774 Allison Harrison 203A Pine Court Herndon, VA 20170 Single 444-44-4444 John Parker 212 Tradition Lane Herndon, VA 20170 Married 333-33-3333 2 Pierre Sternberg 41 Seward Boulevard Herndon, VA 20170 Note that Pierre Sternberg was hired in November, and his first day of work was Monday, November 27 Additionally, due to an economic downturn, Allison Harrison was laid off in mid-December, with her last day of work on Friday, December 15. All employees of Ellipses Corp. work a regular 40-hour workweek (thus all hours worked over 40 in a given week are overtime hours), receive overtime pay at a rate of 1.5 times the regular wage rate, and are paid weekdy on Friday for the current week (which runs from Saturday through Friday, although employees never work on weekends). The SUTA tax rate applicable to Ellipses Corp. is 3.1%, while the SUTA wage base in Virginia is $8,000 Earnings and voluntary deduction information for each of the four employees is as follows. Regular wage Rate Salary Annual Weekly 401(k) Weekly Charitable Name Deduction Contribution $5 Iss Parker Cranston $15/hour N/A N/A 203,00020 N/A $112,000.20 | 1%of gross pay 6% of gross pay Allison Harrison$23/hou John Parker Pierre Sternberg N/A % of gross pay N/A $20 | N/A One-Mionth Project 227 11 months of the year have passed, and all payroll-related n2017.Paroll data for each of the four employees for the first three quarters activity has been properly accounted for as of of the year, as well as for the of October and November, is as follows. Parker Cranston Federal State riod Earnings Income Tax Income Tax Security Tax Tax Medicare 401(k) Charitable pe 1st quarter $7,800 2nd quarter $7,800 Deduction Cont $312 $312 3rd quarter$7,800$312 S96 S96 $366.60 $483.60 $483.60 $483.60 $148.80 $148.80 $113.10 $468 $113.10 $468 113.10 $468 34.80 $144 $34.80$144 $366.60 $65 $65 $20 $20 $2,400 $112.80 November $2,400 $112.80 Allison Harrison Gross Earnings Income Tax Income Tax Security Tax Tax Federal State Medicare 401(k Charitable Period 1st quarter$11,960 $546 2nd quarter $11,960 $546 rd quarter $11,960 S546 October November $3,680 $168 Deduction Cont. $568.10 $568.10 $568.10 $174.80 $174.80 $741.52 $741.52 $741.52 $228.16 $228.16 $173.42 $598 $173.42 $598 $173.42 $598 $53.36$184 $53.36 $184 $65 $3,680 $168 $20 John Parker Charitable Medicare 401(k) State Federal Gross Period Earnings Income Tax Income Tax Security Tax Tax 1st quarter s50,750.0s $12,073.10 $2,537.47 $3,146.52 nd quarter 50,750.05 $12,073.10$2,537.47 $3,146.52 $735.93 so 3rd quarter $50,750.05 $12,073.10$2,537.47 $1,593.36 $735.93 s October $15,615.40 $3,714.80 November $15,615.40 $3,714.80 $780.76 Deduction Cont $260 $260 $260 $80 $80 $735.93 $0 $226.44 so $780.76 s $226.44$0 228Palunting Chaper 7 Camrehensve-Paper Based versknis Pierre Stemberg 401(k) Charitable Deduction Cont Medicare Social state Federal Gross so Period Ea tst quarter $0 and quarter so ard quarter $0 rmings income Tax income Tax Security Tax Tax s0 so s0 $0 so $0 so so $31.23 SO $0 October $0 November $2,153.85$288.68 Note that all tax payments and flings are made on the due date. Based on the data provided here, you wil 21.54So $133.54 $106.62 complete the following Establish an employee earnings record for each of the company's four employees. Complete the top portion of each record 2. Establish and complete the payroll register for each weekly pay period during December. When calculating tax withholding, use the withholding tables where possible, and refer to the percentage method only when necessary Note that as of December 2, Parker Cranston requests that his federal withholding allowances increase from two to three (Elipses Corp. makes this change). Additionally, for simplicity, calculate the state income tax withholding as 5% of each employee's taxable pay (which same as taxable pay for FWT). Recall that state income tax withholding would ordinarily be calculated using the applicable state's withholding tables. Payroll checks are remitted to the employees in the same order Cranston, Harrison, Parker, Stermberg) each pay period and are written from a bank account that is used solely for these payments. The first payroll check written in December is check #762. Note that all charitable contributions are deemed to be made on the final day of each pay period. The following information will be required for the completion of these records for the two employees who are compensated via an hourly wage Weekly Hours Worked Weekly Start Date November 25 December 2 December9 December 16 December 23 Parker Cranston Allison Harrison 40 38 43.5 40 37 41 WARNING! The above dates are weekly start dates Refer to a calendar to determine the weky end dates and associated pay dates. keep in mind that tax liability and payment amounts are determined based on the weekly pay dates 3. Complete the employee earnings records for December for each of the four employees., Divide the voluntary records. If directed to do so by your instructor, record the necessary journal entries for each pay period deductions from the payroll register appropriately across the associated columns within the employee earning Three-Month Project 229 ,Complete Form 941 for the 4th quarter. Note that based on the lookback period, the company is a monthly sitor. Assume that all necessary deposits were made on a timely basis and that the employer made deposits equal to the total amount owed for the quarter. Although Virginia quarterly state payrol ors are depositor.A also filed by Ellipses Corp. you will not complete these. If directed to do so by your instructor, NOTE! essary journal entries associated with Form 941 (including those required for any tax payments made) record the Recall from the Form 941 Rounding Considerations section that quarter- and year-end tax figures should not be calculated based on the total taxable earnings for the respective quarter or year Instead, to avoid rounding discrepancies, tax figures within Part 2 of Form 941 should be determined for each employee by adding the individual taxes across each pay period. Complete Form 940 for Ellipses Corp. Note that FUTA payments are made only when required (ie , if the employer is permitted to postpone the payment of these taxes, it will do so untl a point in time when payment must be remitted). If directed to do so by your instructor, record the necessary journal entry associated with Form 940. 5 6. Calculate total SUTA tax owed by the employer. Although Ellipses Corp. will fle state forms in which this figure is reported, you are required to calculate only the total amount owed for the year. subject to federal withholding tax for each of the four employees, and the state identification number for Ellipses Corp. is the same as its federal Employer Identification Number. 7. Complete Copy A of Form W-2 for each of the four employees.State wages were the same as federal wages 8. Complete Form W.3 for Ellipses Corp. Note that the company files the paper version of the form and selects None apply" in the Kind of Employer