Appendix A Continuing Payroll Project: Wayland Custom Woodworking (3 Months, Part 1) [The following information applies to the questions displayed below.] 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 the Utah Employer Account Number is 999-9290-1 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 entire fourth quarter (Q4) of 2017, which consists of the final six 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 The SUTA (UI) rate for Wayland Custom Woodworking is 2.6 percent on the first $33,100. The state withholding rate is 5.0 percent for all income levels and marital statuses, a table has been included to assist with calculations 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 all full time employees, both exempt and nonexempt. For nonexempt employees, such as Stevon Varden, 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, and use this to compute the employee's gross pay based on the number of hours worked. When a nonexempt employee has worked overtime hours for a given pay period, take their regular hourly rate and multiply it by 1.5, round the result to 5 decimal places, and multiply the new rate by their number of overtime hours For exempt employees', such as Anthony Chinson, an hourly rate rounded to five decimal places should be determined using the same method shown above, but gross pay should be determined by taking the exempt employee's yearly salary and dividing it by 24, which is the number of payroll periods with a semimonthly frequency. For example, Chinson's salary is $24,000 and is a full time employee. Chinson's hourly rate is $11.53846 (determined by taking $24,000/2,080), but as e is an exempt employee, the calculation for his gross pay will be $24,000/24, which would give you $1,000. For pay periods that include paid holidays, ensure to distribute an exempt employee's regular pay accordingly to holiday pay based on the number of hours that consist of the holidays for that period After the gross pay has been calculated, round the result to only two decimal points prior to calculating taxes or other After the gross pay has been calculated, round the result to only two decimal points prior to calculating taxes or other withholdings Employees are paid for the following holidays occurring during the final quarter: Thanksgiving day and the day after, Thursday and Friday November 23-24 Christmas, which is a Monday. Employees receive holiday pay for Monday, December 25, and Tuesday, December 26. For the completion of this project, refer to the tax-related information in the table below. For federal withholdingg calculations, use the percentage method tables in Appendix C, which is provided below. For Utah state withholding calculations, use the Utah Schedule 3 tax tables linked below (ensure to use the appropriate Utah table based on each employee's marital status). Both 401(k) and insurance are pretax for federal income tax and Utah income tax. Federal Withholding Allowance (less 401 (k), Section 125) Federal Unemployment Rate (employer only) (less Section 125) Semimonthly Federal Percentage Method Tax Table State Unemployment Rate (employer only) (less Section 125) $168.80 per allowance claimed 0.6% on the first $7,000 of wages Appendix C Page 393 Table #3 2.6% on the first $33,100 of wages See Utah Schedule3,_Table1 or use State Withholding Rate (less 401 (k), Section 125) 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 Anthony Chinson 530 Sylvann Avenue Logan, UT 84321 435-555-1212 Job title: Account Executive Payroll information Married, 1 Withholding allowance Exempt $24,000/year + commission Start Date: 10/1/2017 SSN: 511-22-3333 00-Chins Employee Number Name and Address Anthony Chinson 530 Sylvann Avenue Logan, UT 84321 435-555-1212 Job title: Account Executive Payroll information 00-Chins arried, 1 Withholding allowance Exempt $24,000/year + commission Start Date: 10/1/2017 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: 10/1/2017 SSN: 505-33-1775 01-Pepp:i Sylvia Peppinico 291 Antioch Road Logan, UT 84321 435-555-2244 Job title: Craftsman Married, 7 withholding allowances Exempt $43,500/year Start Date: 10/1/2017 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: 10/1/2017 SSN: 022-66-1131 02-Hisso Leonard Hissop 531 5th Street Logan, UT 84321 435-555-5858 Job title: Purchasing/Shipping Single, 4 withholding allowances Nonexempt $49,500/year Start Date: 10/1/2017 SSN: 311-22-6698 00-Succe Student Success 1650 South Street Logan, UT 84321 435-556-1211 Job title: Accounting Clerk Single, 1 withholding allowance Nonexempt $36,000/year Start Date: 10/1/2017 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 1650 South Street, Logan, UT 84321. Your phone number is 435-556-1211, you were born July 16, 1985, your Utah driver's license number is 887743 expiring in 7/16/2019, and your Social Security number is 555- 55-5555. You are considered a nonexempt employee, have one withholding allowance, and paid a rate of $36,000 per year The balance sheet for WCW as of September 30, 2017, is as follows: Wayland Custom Woodworking Balance Sheet September 30, 2017 Liabilities & Equity Assets 112,490.00 Cash Supplies Office Equipment Inventory Vehicle Accumulated Depreciation, Vehicle Building Accumulated Depreciation, Building Land Total Assets $1,125, 000.00 27,240.00 87,250.00 123,000.00 25,000.00 Accounts Payable Salaries and Wages Payable Federal Unemployment Tax Payable Social Security Tax Payable Medicare Tax Payable State Unemployment Tax Payable Employee Federal Income Tax Payable Employee State Income Tax Payable 401 164,000.00 (k) Contributions Payable 35,750.00 1,587,240.00 Employee Medical Premiums Payable Notes Pavable Utilities Payable Total Liabilities Owners Equity Retained Earnings Total Equity Total Liabilities and Equity 224,750.00 337,240.00 1,250,000.00 1,250,000.00 1,587,240.00 Voluntary deductions for each employee are as follows: Deduction Insurance: $50/paycheck 401(k): 3% of gross pay Insurance: $75/paycheck 401(k): 6% of gross pay Insurance: $75/paycheck 401 (k): $50 per paycheck Insurance: $50/paycheck 401(k): 4% of gross pay Insurance: $75/paycheck 401(k): 3% of gross pay Insurance: $50/paycheck 401(k): 3% of gross pay Name Chinson Wayland Peppinico Varden Hissop Student For additional instructions on how to navigate and work through through Part 1 of this project, please download the student project guide here 2. Complete the payroll process for Wayland Custom Woodworking's fourth quarter pay periods. Please note that for pay periods after October 15, you must carry the current ending year to date (YTD) amounts as they appear from the prior pay period from each employee's Employee Earnings Records form (EERF) to the rows titled "Prior Period YTD". Amounts from the current pay period will be auto-populated to the employee EERFs once you complete the payroll register, and will be combined with the prior period YTD amounts to determine the new current ending YTD amounts. For example, if the year to date gross pay for Anthony Chinson is $5,000 after the October 31 pay period, you would take this amount and add it to the appropriate input box for gross pay on the "Prior Period YTD" row for their November 15 EERF Additionally, you must carry the ending balance from each account in the prior period 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 to another, along with a guided walkthrough example of this process, refer to the project user guide in the project information section above October 15 October 15 is the end of the first pay period for the month of October. Employee pay will be disbursed on October 20, 2017. Any time worked in excess of 80 hours during this pay period is considered overtime for nonexempt employees. Remember that the employees are paid on a semimonthly basis Complete the Employee Gross Pay tab Complete the Payroll Register for October 15. .Refer to the Employee Earnings Record Forms for each employee for the current YTD amounts after you have completed the October 15 Payroll Register. Amounts from the current period are auto-populated from the Payroll Register Complete the General Journal entries for the October 15 payroll Post the journal entries to the General Ledger Wayland EERF Peppinico Varden EERF Hissop EERF Employee Grosspay Chinsorn EERF Payroll Register General ournal General Ledger EERF EERF Compute the hourly rates as well as the gross earnings for regular and overtime pay for each employee for the October 15 pay period. Remember that while you are computing an hourly rate for all employees, the regular pay for exempt employees should be calculated by taking their yearly salary and dividing it by the number of semimonthly pay periods in a year. (Round answers for hourly rate to 5 decimal places and all other answers to 2 decimals.) Show less Hourly Rate (Rounded to 5 Decimals Overtime Commission Pay Period Hours 10/1-10/15 80 hours (exempt) 80 hours (exempt) 80 hours (exempt) 88 hours 85.25 hours 82 hours Regular Last Name Chinson Wayland Peppinico Varden Hissop Success $1,500.00 Employee Grosspay Payroll Register Company Name: Wayland Custom Woodworking 10/15/2017 Run Date PIR Date 10/20/2017 Taxable Wages for | FICA Taxable No of No of Regular Overtime Hours No of HolidayCommissions Earnings Gross Insurance Wages for 401(k) # of Hourly Rate Hours W/H MS Federal W/H Name Hours Anthony Chinson Mark Wayland Sylvia Peppinico Stevon Varden Leonard Hissop Student F Success Totals Taxable Taxable Wages for Wages for Federal W/H FICA Social Check No. Federal W/H Security Tax Gross Earning Medicare WH State W/H Tax Net Pay Name 174556 174557 174558 174559 174560 174561 Anthony Chinson Mark Wayland Sylvia Peppinico Stevon Varden Leonard Hissop Student F Success Totals 2 Prepare the entry to record employee semimonthly payroll expenses for the period ending on October 15. ote: Enter debits before credits. General Journal Debit Credit Date Oct 15 2 3 Prepare the entry to record employer semimonthly payroll taxes for the period ending on October 15 Note: Enter debits before credits. Credit General Journal Debit Date Oct 15 2 Prepare the entry to record payment of semimonthly employee wages for the period ending on October 15 Note: Enter debits before credits. Credit General Journal Debit Date Oct 20 Cash Account No: 101 Account No : 203 Employee Federal Income Tax Payable Debit Credit Date Debit Credit Date Balance Balance Beginning balance Social Security Tax Payable Account No: 204 Account No: 205 Medicare Tax Payable Debit Credit Date Debit Credit Date Balance Balance Employee State Income Tax Payable Account No: 206 401(k) Contributions Payable Debit Account No: 208 Credit Date Debit Credit Date Balance Balance Account No: 209 Salaries and Wages Payable Debit Account No: 210 Employee Medical Premiums Payable Date Credit Debit Credit Date Balance Balance Account No: 211 State Unemployment Tax Payable Debit Federal Unemployment Tax Payable Credit Account No: 212 Date Debit Date Credit Balance Balance Account No: 514 Salaries and Wages Expense Debit Payroll Taxes Expense Account No: 515 Date Debit Credit Date Credit Balance Balance Appendix A Continuing Payroll Project: Wayland Custom Woodworking (3 Months, Part 1) [The following information applies to the questions displayed below.] 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 the Utah Employer Account Number is 999-9290-1 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 entire fourth quarter (Q4) of 2017, which consists of the final six 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 The SUTA (UI) rate for Wayland Custom Woodworking is 2.6 percent on the first $33,100. The state withholding rate is 5.0 percent for all income levels and marital statuses, a table has been included to assist with calculations 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 all full time employees, both exempt and nonexempt. For nonexempt employees, such as Stevon Varden, 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, and use this to compute the employee's gross pay based on the number of hours worked. When a nonexempt employee has worked overtime hours for a given pay period, take their regular hourly rate and multiply it by 1.5, round the result to 5 decimal places, and multiply the new rate by their number of overtime hours For exempt employees', such as Anthony Chinson, an hourly rate rounded to five decimal places should be determined using the same method shown above, but gross pay should be determined by taking the exempt employee's yearly salary and dividing it by 24, which is the number of payroll periods with a semimonthly frequency. For example, Chinson's salary is $24,000 and is a full time employee. Chinson's hourly rate is $11.53846 (determined by taking $24,000/2,080), but as e is an exempt employee, the calculation for his gross pay will be $24,000/24, which would give you $1,000. For pay periods that include paid holidays, ensure to distribute an exempt employee's regular pay accordingly to holiday pay based on the number of hours that consist of the holidays for that period After the gross pay has been calculated, round the result to only two decimal points prior to calculating taxes or other After the gross pay has been calculated, round the result to only two decimal points prior to calculating taxes or other withholdings Employees are paid for the following holidays occurring during the final quarter: Thanksgiving day and the day after, Thursday and Friday November 23-24 Christmas, which is a Monday. Employees receive holiday pay for Monday, December 25, and Tuesday, December 26. For the completion of this project, refer to the tax-related information in the table below. For federal withholdingg calculations, use the percentage method tables in Appendix C, which is provided below. For Utah state withholding calculations, use the Utah Schedule 3 tax tables linked below (ensure to use the appropriate Utah table based on each employee's marital status). Both 401(k) and insurance are pretax for federal income tax and Utah income tax. Federal Withholding Allowance (less 401 (k), Section 125) Federal Unemployment Rate (employer only) (less Section 125) Semimonthly Federal Percentage Method Tax Table State Unemployment Rate (employer only) (less Section 125) $168.80 per allowance claimed 0.6% on the first $7,000 of wages Appendix C Page 393 Table #3 2.6% on the first $33,100 of wages See Utah Schedule3,_Table1 or use State Withholding Rate (less 401 (k), Section 125) 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 Anthony Chinson 530 Sylvann Avenue Logan, UT 84321 435-555-1212 Job title: Account Executive Payroll information Married, 1 Withholding allowance Exempt $24,000/year + commission Start Date: 10/1/2017 SSN: 511-22-3333 00-Chins Employee Number Name and Address Anthony Chinson 530 Sylvann Avenue Logan, UT 84321 435-555-1212 Job title: Account Executive Payroll information 00-Chins arried, 1 Withholding allowance Exempt $24,000/year + commission Start Date: 10/1/2017 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: 10/1/2017 SSN: 505-33-1775 01-Pepp:i Sylvia Peppinico 291 Antioch Road Logan, UT 84321 435-555-2244 Job title: Craftsman Married, 7 withholding allowances Exempt $43,500/year Start Date: 10/1/2017 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: 10/1/2017 SSN: 022-66-1131 02-Hisso Leonard Hissop 531 5th Street Logan, UT 84321 435-555-5858 Job title: Purchasing/Shipping Single, 4 withholding allowances Nonexempt $49,500/year Start Date: 10/1/2017 SSN: 311-22-6698 00-Succe Student Success 1650 South Street Logan, UT 84321 435-556-1211 Job title: Accounting Clerk Single, 1 withholding allowance Nonexempt $36,000/year Start Date: 10/1/2017 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 1650 South Street, Logan, UT 84321. Your phone number is 435-556-1211, you were born July 16, 1985, your Utah driver's license number is 887743 expiring in 7/16/2019, and your Social Security number is 555- 55-5555. You are considered a nonexempt employee, have one withholding allowance, and paid a rate of $36,000 per year The balance sheet for WCW as of September 30, 2017, is as follows: Wayland Custom Woodworking Balance Sheet September 30, 2017 Liabilities & Equity Assets 112,490.00 Cash Supplies Office Equipment Inventory Vehicle Accumulated Depreciation, Vehicle Building Accumulated Depreciation, Building Land Total Assets $1,125, 000.00 27,240.00 87,250.00 123,000.00 25,000.00 Accounts Payable Salaries and Wages Payable Federal Unemployment Tax Payable Social Security Tax Payable Medicare Tax Payable State Unemployment Tax Payable Employee Federal Income Tax Payable Employee State Income Tax Payable 401 164,000.00 (k) Contributions Payable 35,750.00 1,587,240.00 Employee Medical Premiums Payable Notes Pavable Utilities Payable Total Liabilities Owners Equity Retained Earnings Total Equity Total Liabilities and Equity 224,750.00 337,240.00 1,250,000.00 1,250,000.00 1,587,240.00 Voluntary deductions for each employee are as follows: Deduction Insurance: $50/paycheck 401(k): 3% of gross pay Insurance: $75/paycheck 401(k): 6% of gross pay Insurance: $75/paycheck 401 (k): $50 per paycheck Insurance: $50/paycheck 401(k): 4% of gross pay Insurance: $75/paycheck 401(k): 3% of gross pay Insurance: $50/paycheck 401(k): 3% of gross pay Name Chinson Wayland Peppinico Varden Hissop Student For additional instructions on how to navigate and work through through Part 1 of this project, please download the student project guide here 2. Complete the payroll process for Wayland Custom Woodworking's fourth quarter pay periods. Please note that for pay periods after October 15, you must carry the current ending year to date (YTD) amounts as they appear from the prior pay period from each employee's Employee Earnings Records form (EERF) to the rows titled "Prior Period YTD". Amounts from the current pay period will be auto-populated to the employee EERFs once you complete the payroll register, and will be combined with the prior period YTD amounts to determine the new current ending YTD amounts. For example, if the year to date gross pay for Anthony Chinson is $5,000 after the October 31 pay period, you would take this amount and add it to the appropriate input box for gross pay on the "Prior Period YTD" row for their November 15 EERF Additionally, you must carry the ending balance from each account in the prior period 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 to another, along with a guided walkthrough example of this process, refer to the project user guide in the project information section above October 15 October 15 is the end of the first pay period for the month of October. Employee pay will be disbursed on October 20, 2017. Any time worked in excess of 80 hours during this pay period is considered overtime for nonexempt employees. Remember that the employees are paid on a semimonthly basis Complete the Employee Gross Pay tab Complete the Payroll Register for October 15. .Refer to the Employee Earnings Record Forms for each employee for the current YTD amounts after you have completed the October 15 Payroll Register. Amounts from the current period are auto-populated from the Payroll Register Complete the General Journal entries for the October 15 payroll Post the journal entries to the General Ledger Wayland EERF Peppinico Varden EERF Hissop EERF Employee Grosspay Chinsorn EERF Payroll Register General ournal General Ledger EERF EERF Compute the hourly rates as well as the gross earnings for regular and overtime pay for each employee for the October 15 pay period. Remember that while you are computing an hourly rate for all employees, the regular pay for exempt employees should be calculated by taking their yearly salary and dividing it by the number of semimonthly pay periods in a year. (Round answers for hourly rate to 5 decimal places and all other answers to 2 decimals.) Show less Hourly Rate (Rounded to 5 Decimals Overtime Commission Pay Period Hours 10/1-10/15 80 hours (exempt) 80 hours (exempt) 80 hours (exempt) 88 hours 85.25 hours 82 hours Regular Last Name Chinson Wayland Peppinico Varden Hissop Success $1,500.00 Employee Grosspay Payroll Register Company Name: Wayland Custom Woodworking 10/15/2017 Run Date PIR Date 10/20/2017 Taxable Wages for | FICA Taxable No of No of Regular Overtime Hours No of HolidayCommissions Earnings Gross Insurance Wages for 401(k) # of Hourly Rate Hours W/H MS Federal W/H Name Hours Anthony Chinson Mark Wayland Sylvia Peppinico Stevon Varden Leonard Hissop Student F Success Totals Taxable Taxable Wages for Wages for Federal W/H FICA Social Check No. Federal W/H Security Tax Gross Earning Medicare WH State W/H Tax Net Pay Name 174556 174557 174558 174559 174560 174561 Anthony Chinson Mark Wayland Sylvia Peppinico Stevon Varden Leonard Hissop Student F Success Totals 2 Prepare the entry to record employee semimonthly payroll expenses for the period ending on October 15. ote: Enter debits before credits. General Journal Debit Credit Date Oct 15 2 3 Prepare the entry to record employer semimonthly payroll taxes for the period ending on October 15 Note: Enter debits before credits. Credit General Journal Debit Date Oct 15 2 Prepare the entry to record payment of semimonthly employee wages for the period ending on October 15 Note: Enter debits before credits. Credit General Journal Debit Date Oct 20 Cash Account No: 101 Account No : 203 Employee Federal Income Tax Payable Debit Credit Date Debit Credit Date Balance Balance Beginning balance Social Security Tax Payable Account No: 204 Account No: 205 Medicare Tax Payable Debit Credit Date Debit Credit Date Balance Balance Employee State Income Tax Payable Account No: 206 401(k) Contributions Payable Debit Account No: 208 Credit Date Debit Credit Date Balance Balance Account No: 209 Salaries and Wages Payable Debit Account No: 210 Employee Medical Premiums Payable Date Credit Debit Credit Date Balance Balance Account No: 211 State Unemployment Tax Payable Debit Federal Unemployment Tax Payable Credit Account No: 212 Date Debit Date Credit Balance Balance Account No: 514 Salaries and Wages Expense Debit Payroll Taxes Expense Account No: 515 Date Debit Credit Date Credit Balance Balance