PEACHTREE COMPLETE 2009 WORKSHOP 4 PETE S MARKET

Transcription

1 PEACHTREE COMPLETE 2009 WORKSHOP 4 PETE S MARKET Mini Practice Set Completing First Quarter Payroll for Pete s Market This workshop adds to Peachtree skills learned in Workshops 1 through 3 so complete those workshops before beginning this one. In this workshop you prepare paychecks for employees of Pete s Market and remit payroll taxes to government taxing agencies. You will need to download the Petes Market data file for Peachtree 2009 from the My Accounting Lab website before beginning this workshop. Refer to the Installing Peachtree Complete Accounting and Student Data Files document for instructions on downloading this file. What follows is background information on the company. Pete Reel owns Pete s Market, which is located at 4 Sun Avenue, Swampscott, Massachusetts The business has three employees who are paid once per month at the end of the month. Paychecks are printed out of the payroll checking account and funds are then transferred from the cash account to the payroll cash checking account. You do not have to calculate employee payroll tax withholdings and employer payroll tax liabilities when preparing paychecks because the software does this automatically. However, it helps to understand how the software is setup to calculate such taxes and the following provides this information. 1. OASDI and Medicare Taxes (i.e., together called FICA) a) OASDI (Social Security) i) Employees must withhold 6.2 percent of the first $102,000 in gross wages paid each per year. ii) Pete s must pay employer taxes at the same rate as employees. b) Medicare Taxes i) Employees must withhold 1.45 percent of annual gross wages. ii) Pete s must pay employer taxes at the same rate as employees.

2 Peachtree Complete 2009 Workshop 4 Pete s Market Page 2 2. Federal Income Tax (FIT) a) Employee withholdings for federal income taxes are calculated by referring to tables provided by the IRS in Circular E. These tables are updated each year and the software is set to use the Circular E monthly payroll table that follows. The IRS has two distinct methods of calculating employee income tax withholdings. The first method incorporates a series of tables that you select based on marital status and pay frequency. You then withhold the tax amount that appears at the intersection of an employee s wage bracket along with the number of claimed exemptions. These tables are illustrated in the text. The second method uses percentage based tables. These tables are also chosen by marital status and pay frequency but tax is calculated as a percentage based on pay bracket. The pay bracket is determined after subtracting from gross wages an amount for each withholding allowance claimed by the employee.

3 Peachtree Complete 2009 Workshop 4 Pete s Market Page 3 3. State Income Tax (SIT) a) Employee state income tax withholdings are calculated similar to federal income tax withholdings. Tables for withholding these taxes are already built into the tax table supplied with the data file.

4 Peachtree Complete 2009 Workshop 4 Pete s Market Page 4 4. State Unemployment Taxes (SUTA) a) Pete s pays an employer tax of 4.9 percent of the first $10,800 in gross wages paid to each employee per year. 5. Federal Unemployment Taxes (FUTA) a) Pete s pays an employer tax of 0.8 percent of the first $7,000 in gross wages paid to each employee per year. The Payroll module in Peachtree integrates with the General Ledger module so that payroll transactions are automatically recorded in the Payroll Journal and general ledger accounts. In addition, employee earnings and withholding records are automatically updated. You will not be asked to print Form 941 but the software can print this report. The following is a list of Pete s Market employees along with their monthly gross wages for the first payroll quarter. All employees claim the single filing status with zero allowances. January February March Fred Flynn $2,500 $2,590 $3,100 Mary Jones 3,000 3,000 4,000 Lilly Vron 3,200 3,400 4,260 The trial balance for Pete s Market at 1/1/08 appears next. Debits Credits 1010 Cash 84, Payroll Checking Cash 2310 FIT Payable 1, SIT Payable Social Security Tax Payable 1, Medicare Tax Payable FUTA Payable SUTA Payable 1, Pete Reel, Capital 80, , ,964.04

5 Peachtree Complete 2009 Workshop 4 Pete s Market Page 5 Open the Company Data File 1. Begin by opening Peachtree and then open the company data file named Pete s Market. Add Your Name to the company Name 2. Click Maintain on the main menu and select Company Information. Add your name to the end of the company name as illustrated in previous workshops. Remember to click OK to store your changes. Record Payment of December Payroll Liabilities and Taxes 3. Begin your transactions by recording the following general journal entries that post payments for last month's payroll tax liabilities. Refer to the trial balance previously illustrated to determine the payment amount. These payments were made out of the 1010 Cash account. Use the Date listed on each transaction. Also enter a brief Reference and description for each transaction. (Note: You can enter using a compound journal entry; however, in the real world, you would be writing checks to different agencies, probably on different dates, since each tax liability has a different due date.) 2008 Jan. 15 Record payment of Social Security, Medicare, and FIT withholdings for December 2007 using a compound journal entry. 15 Record payment of SIT tax withholdings for December Record payment of SUTA taxes for the fourth quarter of Record payment of FUTA taxes for the fourth quarter of Close the General Journal Entry window. Create Paychecks 5. You will now create employee paychecks for January 31, Set the System Date to 1/31/2008. Click this icon to activate the Employees and Payroll center illustrated next.

6 Peachtree Complete 2009 Workshop 4 Pete s Market Page 6 6. Click the Pay Employees icon on the center and select Enter Payroll For Multiple Employees to open the window illustrated next. (Note: If prompted to purchase the tax service, select the option to not display this message in the future and then click No. Also, If prompted about new benefit support, set the option to not display future messages and click No.)

7 Peachtree Complete 2009 Workshop 4 Pete s Market Page 7 7. Click OK and the Select Employees to Pay window opens as illustrated next. Notice that all employees are marked to be paid. The window also displays each employee s net pay (i.e., Check Amount) and gross pay (i.e., Salary).

8 Peachtree Complete 2009 Workshop 4 Pete s Market Page 8 Review Paycheck Details 8. You will now review the details for a paycheck. Click to select Fred Flynn and click the Detail icon to open the window illustrated next, which lists employee withholdings and employer taxes.

9 Peachtree Complete 2009 Workshop 4 Pete s Market Page 9 9. Click OK to exit the window. Print Paychecks 10. Before continuing, click the lookup on the Cash Acct and change the account to 1020 Payroll Cash Checking. Peachtree will now credit this cash account. 11. Click Print and enter 100 as the first check number. (See the next illustration.) Verify the Printer and, if needed, click Printer Setup to choose a printer.

10 Peachtree Complete 2009 Workshop 4 Pete s Market Page Click Print. When prompted, click Yes to confirm printing the checks so that Peachtree assigns a check number. Displaying and Printing the Payroll Register 13. You will now display the payroll register. On the bottom right of the Employees and Payroll center click the link to View All Employees and Payroll Reports to open the reporting window. You can also click the Reports icon. 14. Double click Payroll Register to display the report illustrated next. You will use this report to determine net pay for the payroll period so that you can then transfer monies from the Cash account to the Payroll Checking account.

11 Peachtree Complete 2009 Workshop 4 Pete s Market Page Close the report and the reporting window. Make a Bank Transfer 16. Now post the following general journal entry that transfers monies from the 1010 Cash account into the 1020 Payroll Checking Cash account to cover the paychecks Jan. 31 Transfer net pay of $6, from cash into payroll checking. Print Reports 17. Print the following January reports to document transactions. a. General Journal (Check figure = $11,394.48) b. General Ledger Trial Balance (Check figure = $83,431.01)

12 Peachtree Complete 2009 Workshop 4 Pete s Market Page 12 Backup January Transactions 18. Create a backup file that includes the company name. Backup procedures were illustrated in previous workshops and instructions are also found in the Backing Up and Restoring Your Work in Peachtree document located on the My Accounting Lab website. Close the Accounting Period 19. Click the Period icon on the toolbar and change the accounting period to 02 Feb 01, 2008 to Feb 29, Click No to printing reports and No to running an Internal Accounting Review. 20. The Period icon should now display Period 2. Pay January Payroll Liabilities 21. Refer to your January 31, 2008 trial balance report and record a journal entry for the following payroll liabilities. All payments are made out of the 1010 Cash account Feb. 15 Record payment of Social Security, Medicare, and FIT liabilities for January payroll. 15 Record payment of SIT liabilities for January payroll. Record February Payroll Transactions 22. Create paychecks for the pay period ended February 29, 2008 using the following information for gross pay. Notice that gross pay for Fred and Lilly has increased this month so you will need to change their gross pay in the Select Employees to Pay window. This is done by clicking the Salary field for the employee and typing in the new amount. February Fred Flynn $2,590 Mary Jones 3,000 Lilly Vron 3, Print these paychecks on starting check number Print the Payroll Register (Check figure for Net Pay = $6,617.35) 25. Transfer the net pay amount from the cash account into the payroll checking cash account.

13 Peachtree Complete 2009 Workshop 4 Pete s Market Page 13 Print Reports 26. Print the following February reports. a. General Journal (Check figure = $9,552.46) b. General Ledger Trial Balance (Check figure = $84,068.72) Backup February Transactions 27. Create a backup file that includes the company name. You may also need to change the date on the file name. Close the Accounting Period 28. Click the Period icon on the toolbar and change the accounting period to 03 Mar 01, 2009 to Mar 31, Click No to printing reports and No to running an Internal Accounting Review. 29. The Period icon should now display Period 3. Record Payment of February Payroll Liabilities 30. Record the following general journal entry by referring to the February trial balance report. All payments are made from the 1010 Cash account Mar. 15 Record payment of Social Security, Medicare, and FIT liabilities for February's payroll. 15 Record payment of SIT liabilities for February s payroll. Record March Payroll Transactions 31. Create paychecks for the pay period ended March 31, 2008 using the following gross pay information. February Fred Flynn $3,100 Mary Jones 4,000 Lilly Vron 4, Print these paychecks on starting check number Print the Payroll Register (Check figure for Net Pay = $8,095.35) 34. Transfer the net pay amount from the cash account into the payroll checking cash account.

14 Peachtree Complete 2009 Workshop 4 Pete s Market Page 14 Print Reports 35. Print the following March reports. a. General Journal (Check figure = $11,155.74) b. General Ledger Trial Balance (Check figure = $85,722.20) Backup March Transactions 36. Make a backup file that includes the company name and change the date on the file name if needed. Close the Accounting Period 37. Click the Period icon on the toolbar and change the accounting period to 04 Apr 01, 2009 to Apr 30, Click No to printing reports and No to running an Internal Accounting Review. 38. The Period icon should now display Period 4. Record Payment of March Payroll Liabilities 39. Record payment of the following payroll liabilities by referring to the March trial balance. All payments are made out of the 1010 Cash account Apr. 15 Record payment of Social Security, Medicare, and FIT liabilities from March payroll. 15 Record payment of SIT liabilities from March payroll. 15 Record payment of SUTA liabilities for the first quarter. 15 Record payment of FUTA liabilities for the first quarter. Print Reports 40. Print the following April reports. a. General Journal (Check figure = $5,722.20) b. General Ledger Trial Balance (Check figure = $80,000.00) Backup Your Work and Exit 41. You have now completed the workshop so back up your work. 42. You can now exit the software.