Ellipses Corp is a small business that operates in Herndon, VA. The company is located at10...

 

    

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Ellipses Corp is a small business that operates in Herndon, VA. The company is located at10 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 3rd party designee on forms. During 2016 four individuals are employed by Ellipses Corp. These employees are as follows. Name Address Social Federal State W/H Marital Status Security # W/H Allowances Allowances Parker 85 Southern Road 111-11-1111 2 Married Cranston Herndon, VA 20170 Allison 203A Pine Court 777-77-7777 4 3 Married Harrison Herndon, VA 20170 John Parker 212 Tradition Lane 444-44-4444 1 1 Single Herndon, VA 20170 41 Seward Boulevard 333-33-3333 Herndon, VA 20170 Pierre 2 Married Sternberg Note that Picrre Sternberg was hired in November, and his first day of work was Monday, November 28. Additionally, due to an cconomic downturn, Allison Harrison was laid off in mid-December, with her last day of work on Friday, December 16. All employees of Ellipses Corp. work a regular 40-hour week, receive overtime pay at a rate of 1.5 times the regular wage rate, and are paid weekly 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. Weekly 401 (k) Deduction Weekly Charitable Annual Salary Regular Wage Rate Name Contribution 6% of gross pay 5% of gross pay Parker Cranston $15/hour n/a $5 Allison Harrison $23/hour n/a $5 John Parker n/a $203,000.20 n/a $20 Pierre Sternberg n/a $112,000.20 1% of gross pay n/a 2. The first 11 months of the year have passed, and all payroll-related activity has been properly accounted for as of 11/30/16. Payroll data for each of the four employees for the first three quarters of the year, as well as for the months of October and November is as follows. Parker Cranston 401 (k) Deduction Contribution Period Gross Federal State Social Medicare Charitable Earning Income Income Security Tax Тах Тах Тах 1st Qtr 2nd Qtr 3rd Qtr $312.00 $366.60 $483.60 $113.10 $468.00 $65.00 $7,800.00 $7,800.00 $7,800.00 $3,000.00 $2,400.00 $312.00 $366.60 $483.60 $113.10 $468.00 $65.00 $312.00 $366.60 $483.60 $113.10 $468.00 $65.00 $25.00 $20.00 October $120.00 $141.00 $186.00 $43.50 $180.00 November $96.00 $112.80 $148.80 $34.80 $144.00 Allison Harrison 401 (k) Deduction Contribution Period Gross Federal State Social Medicare Charitable Earning Income Income Security Tax Таx Тах Тах 1st Qtr 2nd Qtr 3rd Qtr $598.00 $65.00 $11,960.00 $546.00 $11,960.00 $546.00 $11,960.00 $546.00 $4,600.00 $3,680.00 $568.10 $741.42 $173.42 $568.10 $741.42 $173.42 $598.00 $65.00 $568.10 $741.42 $173.42 $598.00 $65.00 $230.00 $66.70 $53.36 October $210.00 $218.50 $285.20 $25.00 November $168.00 $174.80 $228.16 $184.00 $20.00 John Parker Period Gross Federal State Social Medicare 401 (k) Charitable Income Deduction Contribution Security Таx Earning Income Таx Тах Таx 1st Qtr 2nd Qtr 3rd Qtr $50,750.05 $12,110.54 $2,537.47 | $3,146.52 $735.93 $50,750.05 $12,110.54 $2,537.47 $3,146.52 $735.93 $50,750.05 $12,110.54 | $2,537.47 | $3,146.52 $735.93 $283.05 $0 $260.00 $0 $260.00 $0 $260.00 $975.95 $0 $0 $100.00 $19,519.25 $4,657.90 November $15,615.40 $3,726.32 October $780.76 $O $226.44 $0 $80.00 Pierre Sternberg Period 401 (k) Deduction Contribution Gross Federal State Social Medicare Charitable Security Tax Таx Earning Income Income Таx Таx $0 1st Qtr 2nd Qtr 3rd Qtr $0 $0 O$ $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $O $0 October $0 $0 $0 $0 $0 $0 November $2,153.85 $290.38 $106.62 $133.54 $31.23 $21.54 $0 Note that all tax payments and filings are made on the due date. Based on the data provided here, you will complete the following: 1. 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 federal income tax withholding, use the withholding tables where possible, and refer to the percentage method only when necessary. Note that as of December 3, Park Cranston requests that his federal withholding allowances increase from two to three (Ellipses Corp. makes this change). Additionally, for simplicity, calculate the state income tax withholding as 5% of each employee's taxable pay (which is the 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, Sternberg) 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 employee who are compensated via an hourly wage. Weekly Hours Worked Weekly Start Date Parker Cranston Allison Harrison December 3 40 37 December 10 38 41 December 17 43.5 December 24 40 WARNING! The above dates are weekly start dates. Refer to a calendar to determine the weekly 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. Record the necessary journal entries for each pay period. 4. Complete Form 941 for the 4th quarter. Note that based on the lookback period, the company is a monthly depositor. 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 payroll forms are also filed by Ellipses Corp., you will not complete these. Record the necessary journal entries associated with Form 941 (including those required for any tax payments made). NOTE: 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, these tax figures should be determined for each employee by adding the individual taxes across each pay period. 5. Complete Form 940 for Ellipses Corp. Note that FUTA payments are made only when required (i.e. if the employer is permitted to postpone the payment of these taxes, it will do so until a point in time when payment must be remitted). Record the necessary journal entry associated with Form 940. 6. Calculate the total SUTA tax owed by the employer. Although Ellipses Corp. will file state forms in which this figure is reported, you are required to calculate only the total amount owed for the year. 7. Complete Copy A of form W-2 for each of the four employees. State wages were the same as federal wages for each of the four employees, and the state identification number for Ellipses Corp. is the same as its federal Employer Identification Number. 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. Ellipses Corp is a small business that operates in Herndon, VA. The company is located at10 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 3rd party designee on forms. During 2016 four individuals are employed by Ellipses Corp. These employees are as follows. Name Address Social Federal State W/H Marital Status Security # W/H Allowances Allowances Parker 85 Southern Road 111-11-1111 2 Married Cranston Herndon, VA 20170 Allison 203A Pine Court 777-77-7777 4 3 Married Harrison Herndon, VA 20170 John Parker 212 Tradition Lane 444-44-4444 1 1 Single Herndon, VA 20170 41 Seward Boulevard 333-33-3333 Herndon, VA 20170 Pierre 2 Married Sternberg Note that Picrre Sternberg was hired in November, and his first day of work was Monday, November 28. Additionally, due to an cconomic downturn, Allison Harrison was laid off in mid-December, with her last day of work on Friday, December 16. All employees of Ellipses Corp. work a regular 40-hour week, receive overtime pay at a rate of 1.5 times the regular wage rate, and are paid weekly 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. Weekly 401 (k) Deduction Weekly Charitable Annual Salary Regular Wage Rate Name Contribution 6% of gross pay 5% of gross pay Parker Cranston $15/hour n/a $5 Allison Harrison $23/hour n/a $5 John Parker n/a $203,000.20 n/a $20 Pierre Sternberg n/a $112,000.20 1% of gross pay n/a 2. The first 11 months of the year have passed, and all payroll-related activity has been properly accounted for as of 11/30/16. Payroll data for each of the four employees for the first three quarters of the year, as well as for the months of October and November is as follows. Parker Cranston 401 (k) Deduction Contribution Period Gross Federal State Social Medicare Charitable Earning Income Income Security Tax Тах Тах Тах 1st Qtr 2nd Qtr 3rd Qtr $312.00 $366.60 $483.60 $113.10 $468.00 $65.00 $7,800.00 $7,800.00 $7,800.00 $3,000.00 $2,400.00 $312.00 $366.60 $483.60 $113.10 $468.00 $65.00 $312.00 $366.60 $483.60 $113.10 $468.00 $65.00 $25.00 $20.00 October $120.00 $141.00 $186.00 $43.50 $180.00 November $96.00 $112.80 $148.80 $34.80 $144.00 Allison Harrison 401 (k) Deduction Contribution Period Gross Federal State Social Medicare Charitable Earning Income Income Security Tax Таx Тах Тах 1st Qtr 2nd Qtr 3rd Qtr $598.00 $65.00 $11,960.00 $546.00 $11,960.00 $546.00 $11,960.00 $546.00 $4,600.00 $3,680.00 $568.10 $741.42 $173.42 $568.10 $741.42 $173.42 $598.00 $65.00 $568.10 $741.42 $173.42 $598.00 $65.00 $230.00 $66.70 $53.36 October $210.00 $218.50 $285.20 $25.00 November $168.00 $174.80 $228.16 $184.00 $20.00 John Parker Period Gross Federal State Social Medicare 401 (k) Charitable Income Deduction Contribution Security Таx Earning Income Таx Тах Таx 1st Qtr 2nd Qtr 3rd Qtr $50,750.05 $12,110.54 $2,537.47 | $3,146.52 $735.93 $50,750.05 $12,110.54 $2,537.47 $3,146.52 $735.93 $50,750.05 $12,110.54 | $2,537.47 | $3,146.52 $735.93 $283.05 $0 $260.00 $0 $260.00 $0 $260.00 $975.95 $0 $0 $100.00 $19,519.25 $4,657.90 November $15,615.40 $3,726.32 October $780.76 $O $226.44 $0 $80.00 Pierre Sternberg Period 401 (k) Deduction Contribution Gross Federal State Social Medicare Charitable Security Tax Таx Earning Income Income Таx Таx $0 1st Qtr 2nd Qtr 3rd Qtr $0 $0 O$ $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $O $0 October $0 $0 $0 $0 $0 $0 November $2,153.85 $290.38 $106.62 $133.54 $31.23 $21.54 $0 Note that all tax payments and filings are made on the due date. Based on the data provided here, you will complete the following: 1. 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 federal income tax withholding, use the withholding tables where possible, and refer to the percentage method only when necessary. Note that as of December 3, Park Cranston requests that his federal withholding allowances increase from two to three (Ellipses Corp. makes this change). Additionally, for simplicity, calculate the state income tax withholding as 5% of each employee's taxable pay (which is the 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, Sternberg) 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 employee who are compensated via an hourly wage. Weekly Hours Worked Weekly Start Date Parker Cranston Allison Harrison December 3 40 37 December 10 38 41 December 17 43.5 December 24 40 WARNING! The above dates are weekly start dates. Refer to a calendar to determine the weekly 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. Record the necessary journal entries for each pay period. 4. Complete Form 941 for the 4th quarter. Note that based on the lookback period, the company is a monthly depositor. 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 payroll forms are also filed by Ellipses Corp., you will not complete these. Record the necessary journal entries associated with Form 941 (including those required for any tax payments made). NOTE: 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, these tax figures should be determined for each employee by adding the individual taxes across each pay period. 5. Complete Form 940 for Ellipses Corp. Note that FUTA payments are made only when required (i.e. if the employer is permitted to postpone the payment of these taxes, it will do so until a point in time when payment must be remitted). Record the necessary journal entry associated with Form 940. 6. Calculate the total SUTA tax owed by the employer. Although Ellipses Corp. will file state forms in which this figure is reported, you are required to calculate only the total amount owed for the year. 7. Complete Copy A of form W-2 for each of the four employees. State wages were the same as federal wages for each of the four employees, and the state identification number for Ellipses Corp. is the same as its federal Employer Identification Number. 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.

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