Wayland Custom Woodworking Pay Roll

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 his Utah Employer Account Number is 999-9290-1. Wayland has determined it will pay their employees on a semimonthly basis.

Students will complete the payroll for the final quarter of 2015, and will file fourth quarter and annual tax reports on the appropriate dates. When writing out the dollar amount for each check, spell out all words and the cents are presented over 100, for example 50 cents would be 50/100.

Federal income tax should be computed using the percentage method tables in Appendix C. FUTA information is in the table below. The Utah state income tax rate and the SUTA (UI) rate are in the table below.

Rounding can create a challenge. For these exercises, the rate for the individuals is not rounded. So take their salary and divide by 2,080 (52 weeks at 40 hours per week) for full time, nonexempt employees. For example, 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. Exempt employees salaries are divided by 24 (number of payrolls for semimonthly.) For example, Chinson’s salary is $24,000 and is a full time employee, so the calculation will be $24,000/24, which would give you $1,000. After this hourly rate is determined, than it can be applied to the number of hours worked. After the gross pay has been calculated, round this number to only two decimal points prior to calculating taxes or other withholdings.

For the completion of this project the following information can be located in Appendix C. Students will use the Percentage method for federal income tax and the tax tables have been provided for Utah. Both 401(k) and insurance are pretax for federal income tax and Utah income tax. Round calculations to get to final tax amounts and 401(k) contributions after calculating gross pay.

 

Federal Withholding Allowance (less 401(k), Section 125)$166.70 per allowance claimed

  Semimonthly Federal Percentage Method Tax TableAppendix C, Page 293, Table #3

  Federal Unemployment Rate (Federal unemployment rate less Section 125 health insurance)0.6% on the first $7,000 of wages

State Withholding Rate (less 401(k), Section 125)See Utah Schedule 3

State Unemployment Rate (less Section 125)2.6% on the first $31,300 of wages

 

Wayland Custom Woodworking
Balance sheet
9/30/2015

Assets
Liabilities & Equity

  Cash$1,125,000.00
Accounts Payable$112,490.00  

  Supplies
27,240.00
Salaries and Wages Payable
 

  Office Equipment
87,250.00
Federal Unemployment Tax Payable
 

  Inventory
123,000.00
Social Security Tax Payable
 

  Vehicle
25,000.00
Medicare Tax Payable
 

  Accumulated Depreciation, Vehicle

State Unemployment Tax Payable
 

  Building
164,000.00
Employee Federal Income Tax Payable
 

  Accumulated Depreciation, Building

Employee State Income Tax Payable
 

  Land
35,750.00
401(k) Contributions Payable
 

Employee Medical Premiums Payable
 

  Total Assets
1,587,240.00
Notes Payable
224,750.00  

Utilities Payable
 

Total Liabilities
337,240.00  

 

Owners' Equity
1,250,000.00  

Retained Earnings
–  

Total Equity
1,250,000.00

 

Total Liabilities and Equity
1,587,240.00

 

 

 

October 1:

Wayland Custom Woodworking (WCW) pays its employees according to their job classification. The following employees comprise Wayland’s staff:

  Employee NumberName and AddressPayroll information

  00-ChinsAnthony Chinson
530 Sylvann Avenue
Logan, UT 84321
435-555-1212
Job title: Account ExecutiveMarried, 1 withholding allowance
Exempt
$24,000/year + commission
Start Date: 10/1/2015
SSN: 511-22-3333

  00-WaylaMark Wayland
1570 Lovett Street
Logan, UT 84321
435-555-1110
Job title: President/OwnerMarried, 5 withholding allowances
Exempt
$75,000/year
Start Date: 10/1/2015
SSN: 505-33-1775

  01-PeppiSylvia Peppinico
291 Antioch Road
Logan, UT 84321
435-555-2244
Job title: CraftsmanMarried, 7 withholding allowances
Exempt
$43,500/year
Start Date: 10/1/2015
SSN: 047-55-9951

  01-VardeStevon Varden
333 Justin Drive
Logan, UT 84321
435-555-9981
Job title: CraftsmanMarried, 2 withholding allowances
Nonexempt
$42,000/year
Start Date: 10/1/2015
SSN: 022-66-1131

  02-HissoLeonard Hissop
531 5th Street
Logan, UT 84321
435-555-5858
Job title: Purchasing/ShippingSingle, 4 withholding allowances
Nonexempt
$49,500/year
Start Date: 10/1/2015
SSN: 311-22-6698

  00-StudeStudent F Success
480-555-3322
Job title: Accounting ClerkSingle, 1 withholding allowance
Nonexempt
$36,000/year
Start Date: 10/1/2015
SSN: 555-55-5555

 

Voluntary deductions for each employee are as follows:

Name           Deduction         

  ChinsonInsurance: $50/paycheck

401(k): 3% of gross pay

  WaylandInsurance: $75/paycheck

401(k): 6% of gross pay

  PeppinicoInsurance: $75/paycheck

401(k): $50 per paycheck

  VardenInsurance: $50/paycheck

401(k): 4% of gross pay

  HissopInsurance: $75/paycheck

401(k): 3% of gross pay

  StudentInsurance: $50/paycheck

401(k): 3% of gross pay

 

The departments are as follows:

       Department 00: Sales and Administration

       Department 01: Factory workers

       Department 02: Delivery and Customer service

1. You have been hired as of October 1 as the new accounting clerk. Your name is Student F. Success and your employee number is 00-STUDE. Your Utah drivers license is 887743 expiring in 7/2018 and social security number is 555-55-5555, and you are non-exempt and paid at a rate of $36,000 per year. Using the information provided, complete the W-4 and the I-9 to start your employee file. Complete as if Single with 1 withholding, you decide to contribute 3% to 401(k) and health insurance is $50 per pay period.

2. Complete the headers of the Employees' Earnings Records for all company employees. Enter the YTD earnings for each employee.

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November 30 is the end of the final pay period for the month. Employee pay will be disbursed on December 3, 201X. Any hours exceeding 88 are considered overtime. Compute the employee gross pay.

Compute the Net Pay for each employee using the payroll register. Once you have computed the net pay, complete the paycheck for each employee (assume that all the employees are paid by check). Date the checks 12/3/1X (current year).

The company is closed and pays for the Friday following Thanksgiving. The employees will receive holiday pay for Thanksgiving and the Friday following. For this period, any hours in excess of 88 hours is considered overtime.

Complete the General Journal entries as follows:

30-Nov Journalize employee pay for the period.
30-Nov Journalize employer payroll tax for the November 30 pay date
03-Dec Journalize payment of payroll to employees (use one entry for all checks).
03-Dec Journalize remittance of 401(k) and health insurance premiums deducted
03-Dec Journalize remittance of monthly payroll taxes

Update the Employees' Earnings Records for the period’s pay and update the YTD amount.

-NOTE 1: Do not round intermediate calculations and round hourly rate to 5 decimal places & remaining answers to 2 decimal places. If no entry is required for a transaction/event, select "No journal entry required" in the first account field.

-NOTE 2: When writing out the net amount of an employee's check, be sure to write it in the correct format (e.g. Three Hundred Ninety-nine and 75/100). Be sure to capitalize the letters as shown. Enter all dates in mm/dd/yy format where year is entered as 1X.