Continuing Payroll Project: Wayland Custom Woodworking

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Continuing Payroll Project: Wayland Custom Woodworking

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.

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Part 1 Item 1 Required information 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 2016, 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% on the first $32,200. The state withholding rate is 5.0% for all income levels and marital statuses, which will be used in computing Utah withholding tax for each employee using the tax tables provided below. 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 he 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. Employees are paid for the following holidays occurring during the final quarter: • • Thanksgiving day and the day after, Thursday and Friday November 24-25 Christmas, which is a Sunday. When holidays occur on a weekend, the preceding Friday, December 23, is considered a holiday. Employees receive holiday pay for Monday, December 26. For the completion of this project, refer to the tax-related information in the table below. For federal withholding 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) Semimonthly Federal Percentage Method Tax Table Federal Unemployment Rate (employer only) (less Section 125) $168.80 per allowance claimed Appendix C Page 254 Table #3 0.6% on the first $7,000 of wages State Withholding Rate (less 401(k), Section 125) See Utah Schedule 3, Table 1 or use Excel Version of Schedule 3 State Unemployment Rate (employer only) (less Section 125) 2.6% on the first $32,200 of wages The balance sheet for WCW as of September 30, 2016, is as follows: Wayland Custom Woodworking Balance Sheet 9/30/2016 Assets Liabilities & Equity Cash $1,125,000.00 Accounts Payable $ 112,490.00 Salaries and Wages Supplies 27,240.00 Payable Federal Unemployment Office Equipment 87,250.00 Tax Payable Social Security Tax Inventory 123,000.00 Payable Vehicle 25,000.00 Medicare Tax Payable Accumulated State Unemployment Depreciation, Tax Payable Vehicle Employee Federal Building 164,000.00 Income Tax Payable Accumulated Employee State Depreciation, Income Tax Payable Building 401(k) Contributions Land 35,750.00 Payable Total Assets 1,587,240.00 Employee Medical Premiums Payable Notes Payable 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 October 1: Wayland Custom Woodworking (WCW) pays its employees according to their job classification. The following employees comprise Wayland’s staff: Employee Number 00-Chins Name and Address Anthony Chinson 530 Sylvann Avenue Logan, UT 84321 435-555-1212 Job title: Account Executive 00-Wayla Mark Wayland 1570 Lovett Street Logan, UT 84321 435-555-1110 Job title: President/Owner 01-Peppi Sylvia Peppinico 291 Antioch Road Logan, UT 84321 435-555-2244 Job title: Craftsman 01-Varde Stevon Varden 333 Justin Drive Logan, UT 84321 435-555-9981 Job title: Craftsman 02-Hisso Leonard Hissop 531 5th Street Logan, UT 84321 435-555-5858 Job title: Purchasing/Shipping Payroll information Married, 1 Withholding allowance Exempt $24,000/year + commission Start Date: 10/1/2016 SSN: 511-22-3333 Married, 5 withholding allowances Exempt $75,000/year Start Date: 10/1/2016 SSN: 505-33-1775 Married, 7 withholding allowances Exempt $43,500/year Start Date: 10/1/2016 SSN: 047-55-9951 Married, 2 withholding allowances Nonexempt $42,000/year Start Date: 10/1/2016 SSN: 022-66-1131 Single, 4 withholding allowances Nonexempt $49,500/year Start Date: 10/1/2016 SSN: 311-22-6698 00-Succe Student F Success 1650 South Street Logan, UT 84321 435-556-1211 Job title: Accounting Clerk Single, 1 withholding allowance Nonexempt $36,000/year Start Date: 10/1/2016 SSN: 555-55-5555 Voluntary deductions for each employee are as follows: Name Deduction Insurance: $50/paycheck Chinson 401(k): 3% of gross pay Insurance: $75/paycheck Wayland 401(k): 6% of gross pay Insurance: $75/paycheck Peppinico 401(k): $50 per paycheck Insurance: $50/paycheck Varden 401(k): 4% of gross pay Insurance: $75/paycheck Hissop 401(k): 3% of gross pay Insurance: $50/paycheck Student 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 You have been hired as of October 1 as the new accounting clerk. Your employee number is 00-SUCCE. Your name is Student F 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 7/16/2018, 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. Required: 1. Complete the W-4 and, using the given information, complete the I-9 form to start your employee file. Complete it as if you are single with one withholding, you contribute 3% to a 401(k), and health insurance is $50 per pay period. The following file provides the lists of acceptable documents for Form I-9. Form W-4 (2016) Part 2
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Part 1

Item 1
Required information
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 2016, 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% on the first $32,200. The state
withholding rate is 5.0% for all income levels and marital statuses, which will be used in computing Utah
withholding tax for each employee using the tax tables provided below.
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 sh...


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