December 14

• No. 21

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.

• Pay Points

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 in Transaction No. 8.

In addition, the last wage payment and vacation pay must be reported on Form 1099-MISC. A Form 1096 must also be completed. These forms will be completed in February before their due date. (See Transaction Nos. 38 and 39.)

Project Audit Test

Net Paid $2,194.72

Prepare a Wage and Tax Statement, Form W-2, which will be given to the executor of the estate along with the final paycheck.