Study Guide 13 Name Part One Analyzing Payroll Records Perfect Score Analyzing Payroll Records 15 Pts. Analyzing Transactions Affecting Payroll 5 Pts. Analyzing Form W-2 10 Pts. Total 30 Pts. Directions: For each of the following items, select the choice that best completes the statement. Print the letter identifying your choice in the Answers column. 1. All the payroll information needed to prepare payroll and tax reports is found on (A) Form W-4 and the employee earnings record (B) Form W-4 and the payroll register () the payroll register and the employee earnings record (D) Form W-4. (p. 378) 2. The payroll journal entry is based on the totals of the payroll register (A) Total Earnings column, each deduction column, and the Net Pay column (B) Total Earnings, Earnings Regular, Earnings Overtime, and Deductions Total columns () Earnings Regular, Earnings Overtime, and Deductions Total columns (D) Total Earnings, Earnings Regular, and Earnings Overtime Total columns. (p. 379) 3. The Total Earnings column total of a payroll register is journalized as a debit to (A) ash (B) Salary Expense () Employee Income Tax Payable (D) Social Security Tax Payable. (p. 380) 4. The total of the Federal Income Tax column of a payroll register is credited to (A) a revenue account (B) an expense account () a liability account (D) an asset account. (p. 380) 5. The total of the Net Pay column of the payroll register is credited to (A) a revenue account (B) an expense account () an asset account (D) a liability account. (p. 380) 6. When a semimonthly payroll is paid, the credit to ash is equal to the (A) total earnings of all employees (B) total deductions for income tax and social security tax () total deductions (D) net pay of all employees. (p. 380) 7. Employer payroll taxes are (A) assets (B) expenses () revenues (D) none of these. (p. 382) 8. Payroll taxes that are paid by both the employer and the employee are (A) federal unemployment tax and social security tax (B) federal unemployment tax and Medicare tax () social security tax and Medicare tax (D) federal income tax, social security tax, and Medicare tax. (p. 382) 9. A tax paid to administer the unemployment program is the (A) social security tax (B) Medicare tax () federal unemployment tax (D) state unemployment tax. (p. 382) 10. A state tax used to pay benefits to unemployed workers is the (A) social security tax (B) Medicare tax () unemployment tax (D) state unemployment tax. (p. 382) 11. An employee s earnings subject to unemployment taxes are referred to as (A) gross earnings (B) net earnings () FUTA earnings (D) accumulated earnings. (p. 383) 12. Each employer who withholds income tax, social security tax, and Medicare tax from employee earnings must furnish each employee an (A) IRS Form W-4 (B) IRS Form W-2 () IRS Form W-3 (D) IRS Form 941. (p. 387) 13. Each employer is required by law to report payroll taxes on an (A) IRS Form W-4 (B) IRS Form 941 () IRS Form W-2 (D) IRS Form W-3. (p. 389) 14. The form used to report annual earnings and payroll taxes for all employees to the Social Security Administration is the (A) W-2 (B) Form 941 () W-3 (D) W-4. (p. 390) 15. To record the payment of federal unemployment tax, the account debited is (A) a revenue account (B) an expense account () a liability account (D) an asset account. (p. 396) Your Score Answers 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. 13. 14. 15. A B D B D B B hapter 13 Accounting for Payroll and Payroll Taxes 347
Part Two Analyzing Transactions Affecting Payroll Directions: Analyze each of the following transactions into debit and credit parts. Print the letters identifying your choices in the proper Answers column. Answers Account Titles Transactions Debit redit A. ash 1. Paid cash for semimonthly payroll. (p. 380) G B, H, D,, F, A B. Employee Income Tax Payable 2. Recorded employer payroll taxes expense. (p. 384) E H, D, I, J. Health Insurance Premiums Payable 3. Paid cash for liability for employee income tax, social security tax, and Medicare tax. (p. 394) B, H, D A D. Medicare Tax Payable 4. Paid cash for federal unemployment tax liability. (p. 396) E. Payroll Taxes Expense 5. Paid cash for state unemployment F. Retirement ontributions Payable tax liability. (p. 396) G. Salary Expense H. Social Security Tax Payable I. Unemployment Tax Payable Federal J. Unemployment Tax Payable State I J A A 348 Working Papers TE
Name Date lass Part Three Analyzing Form W-2 Directions: Analyze the following statements about a Form W-2, Wage and Tax Statement. Use the Form W-2 below to answer the specific questions about John Butler. Place a T for True or an F for False in the Answers column to show whether each of the following statements is true or false. (p. 387) 22222 b Employer identification number (EIN) 31-0429632 c Employer s name, address, and ZIP code a Employee s social security number 194-81-5823 ThreeGreen Products, Inc. 1501 ommerce Street arlisle, PA 17013 d ontrol number OMB No. 1545-0008 1 Wages, tips, other compensation 2 Federal income tax withheld 30,273.75 620.00 3 Social security wages 4 Social security tax withheld 30,273.75 1,876.97 5 Medicare wages and tips 6 Medicare tax withheld 30,273.75 438.97 7 Social security tips 8 Allocated tips 9 10 Dependent care benefits e Employee s first name and initial Last name Suff. John P. 1014 Bosler Ave. arlisle, PA 17013 Butler 11 Nonqualified plans 12a o d 13 Statutory employee 14 Other o d e f Employee s address and ZIP code 15 State Employer s state ID number 16 State wages, tips, etc. 17 State income tax 18 Local wages, tips, etc. 19 Local income tax 20 Locality name Retirement plan Third-party sick pay e 12b o d e 12c o d e 12d Wage and Tax Form W-2 opy 1 For State, ity, or Local Tax Department Statement 20-- Department of the Treasury Internal Revenue Service 1. John Butler s total salary is more than his total social security salary. 2. This Form W-2 shows John Butler s net pay for the entire year. 3. The amount withheld for Mr. Butler s social security tax was more than the amount withheld for his federal income tax. 4. State income tax was withheld from Mr. Butler s salary. 5. All deductions from Mr. Butler s salary for taxes and retirement plan contributions are shown on his Form W-2. 6. This Form W-2 would indicate whether Mr. Butler had more than one employer during the year. 7. If an employee works for several employers during the year, that employee must receive a Form W-2 from each employer. 8. An employer is required to provide employees with a Form W-2 no later than January 31 of the year following the one for which the report has been completed. 9. When John Butler files his federal income tax return, he must attach opy A of Form W-2 to his return. 10. Businesses in states with state income tax must prepare additional copies of Form W-2. Answers 1. F 2. F 3. T 4. F 5. F 6. F 7. T 8. T 9. F 10. T hapter 13 Accounting for Payroll and Payroll Taxes 349
1 S T 2 D E 3 O 4 W A T E P N A U 5 O S A L A T G R Y E X P E N N S E I T 6 O G L O O K B A M K P E R I O D L R L E N O R I Y S M H E M N E T N T T A X Across 5. The total of gross earnings for all employees earning hourly wages, salaries, and commissions. 6. The 12-month period that ends on June 30th of the prior year that is used to determine how frequently a business must deposit payroll taxes. Down 1. A state tax paid by employers that is used to pay benefits to unemployed workers. 2. The payment of payroll taxes to the government. 3. The chief accountant in an organization, having responsibility for both financial and managerial accounting activities. Sometimes called comptroller. 4. A process that requires an employer to withhold a portion of an employee s paycheck to pay a courtordered debt settlement.16. Earnings paid to an employee after payroll taxes and other deductions. 350 Working Papers TE
Name Date lass 13-1 WORK TOGETHER, p. 381 Recording a payroll 1. Salary Expense 13,800.00 Employee Income Tax Payable 925.00 Social Security Tax Payable 855.60 Medicare Tax Payable 200.10 ash 11,819.30 2. DATE AOUNT TITLE ASH PAYMENTS JOURNAL PAGE K. NO. POST. REF. 1 2 3 4 5 GENERAL AOUNTS PAYABLE DEBIT DEBIT PURHASES DISOUNT 20-- May 15 Salary Expense 564 13 8 0 0 00 11 8 1 9 30 1 1 Employee Income Tax Payable 9 2 5 00 2 2 Social Security Tax Payable 8 5 5 60 3 3 Medicare Tax Payable 2 0 0 10 4 4 6 ASH 5 5 6 6 hapter 13 Accounting for Payroll and Payroll Taxes 351
13-1 ON YOUR OWN, p. 381 Recording a payroll 1. Salary Expense 15,640.00 Employee Income Tax Payable 1,015.00 Social Security Tax Payable 969.68 Medicare Tax Payable 226.78 ash 13,428.54 2. DATE AOUNT TITLE ASH PAYMENTS JOURNAL PAGE K. NO. POST. REF. 1 2 3 4 5 GENERAL AOUNTS PAYABLE DEBIT DEBIT PURHASES DISOUNT 20-- June 30 Salary Expense 776 15 6 4 0 00 13 4 2 8 54 1 1 Employee Income Tax Payable 1 0 1 5 00 2 2 Social Security Tax Payable 9 6 9 68 3 3 Medicare Tax Payable 2 2 6 78 4 4 8 ASH 5 5 6 6 352 Working Papers TE
Name Date lass 13-2 WORK TOGETHER, p. 386 Recording employer payroll taxes 1., 2. 1 2 3 4 5 Employee Name Prior Accumulated Earnings Earnings to Equal FUTA Tax Base Earnings for urrent Pay Period Ellis, Nick. $6,100.00 $ 900.00 $ 762.50 Jennings, Evan P. 7,980.00 0.00 1,040.00 Powers, Virginia A. 4,380.00 2,620.00 527.00 Wolfe, Kerry T. 6,850.00 150.00 849.50 Totals FUTA Earnings $ 762.50 0.00 527.00 150.00 $3,179.00 $1,439.50 Social Security Tax Payable, 6.2% Medicare Tax Payable, 1.45% Unemployment Tax Payable Federal, 0.8% Unemployment Tax Payable State, 5.4% Total Payroll Taxes $ 197.10 46.10 11.52 77.73 $ 332.45 3. GENERAL JOURNAL PAGE 10 DATE AOUNT TITLE DO. NO. POST. REF. DEBIT 15 Payroll Taxes Expense M46 3 3 2 45 7 7 Social Security Tax Payable 1 9 7 10 8 8 Medicare Tax Payable 4 6 10 9 9 Unemployment Tax Payable Federal 1 1 52 10 10 Unemployment Tax Payable State 7 7 73 11 11 12 12 13 13 14 14 15 15 16 16 17 17 18 18 19 19 20 20 hapter 13 Accounting for Payroll and Payroll Taxes 353
13-2 ON YOUR OWN, p. 386 Recording employer payroll taxes 1., 2. 1 2 3 4 5 Employee Name Prior Accumulated Earnings Earnings to Equal FUTA Tax Base Earnings for urrent Pay Period Holt, Stephanie L. $6,380.00 $ 620.00 $ 653.00 Klein, Jacob S. 3,840.00 3,160.00 521.00 Singh, Irene M. 7,290.00 0.00 736.50 Tate, Joyce B. 6,270.00 730.00 614.00 Totals FUTA Earnings $ 620.00 521.00 0.00 614.00 $2,524.50 $1,755.00 Social Security Tax Payable, 6.2% Medicare Tax Payable, 1.45% Unemployment Tax Payable Federal, 0.8% Unemployment Tax Payable State, 5.4% Total Payroll Taxes $ 156.52 36.61 14.04 94.77 $ 301.94 3. GENERAL JOURNAL PAGE 12 DATE AOUNT TITLE DO. NO. POST. REF. DEBIT 15 Payroll Taxes Expense M97 3 0 1 94 7 7 Social Security Tax Payable 1 5 6 52 8 8 Medicare Tax Payable 3 6 61 9 9 Unemployment Tax Payable Federal 1 4 04 10 10 Unemployment Tax Payable State 9 4 77 11 11 12 12 13 13 14 14 15 15 16 16 17 17 18 18 19 19 20 20 354 Working Papers TE
Name Date lass 13-3 WORK TOGETHER, p. 391 Reporting withholding and payroll taxes 1. Form 941 for 20--: (Rev. October 20--) (EIN) Employer identification number Name (not your trade name) Trade name (if any) Address Employer s QUARTERLY Federal Tax Return Department of the Treasury Internal Revenue Service 7 0 8 4 1 8 6 2 5 oncept Designs 12043 Washington Street Number Street Suite or room number ity State ZIP code Read the separate instructions before you complete Form 941. Type or print within the boxes. Part 1: Answer these questions for this quarter. 1 Number of employees who received wages, tips, or other compensation for the pay period including: Mar. 12 (Quarter 1), June 12 (Quarter 2), Sept. 12 (Quarter 3), or Dec. 12 (Quarter 4) 1 2 Wages, tips, and other compensation................. 2 3 Income tax withheld from wages, tips, and other compensation........ 3 951110 OMB No. 1545-0029 Report for this Quarter of 20-- (heck one.) 1: January, February, March 2: April, May, June 3: July, August, September 4: October, November, December 4 If no wages, tips, and other compensation are subject to social security or Medicare tax heck and go to line 6e. olumn 1 5a Taxable social security wages*...124 = 5b Taxable social security tips*....124 = 5c Taxable Medicare wages & tips*..029 = 1 Naperville IL 60540-4158 olumn 2 35,64 00 4,419. 36 35,64 00 1,033. 56 5d Add olumn 2 line 5a, olumn 2 line 5b, and olumn 2 line 5c......... 5d *Report wages/tips for this quarter, including those paid to qualified new employees, on lines 5a 5c. The social security tax exemption on wages/tips will be figured on lines 6c and 6d and will reduce the tax on line 6e. 6a Number of qualified employees first paid exempt wages/tips this quarter See instructions for definitions of qualified employee and 6b Number of qualified employees paid exempt wages/tips this quarter exempt wages/tips. 6c Exempt wages/tips paid to qualified employees this quarter.062 = 6d 6e Total taxes before adjustments (line 3 + line 5d line 6d = line 6e)......... 6e 7a urrent quarter s adjustment for fractions of cents............. 7a 7b urrent quarter s adjustment for sick pay................ 7b 7c urrent quarter s adjustments for tips and group-term life insurance....... 7c 8 Total taxes after adjustments. ombine lines 6e through 7c........... 8 9 Advance earned income credit (EI) payments made to employees....... 9 10 Total taxes after adjustment for advance EI (line 8 line 9 = line 10)....... 10 11 Total deposits, including prior quarter overpayments............ 11 12a OBRA premium assistance payments (see instructions)........... 12a. 8 35,64 00 2,144. 00 5,452. 92 7,596. 92 7,596. 92 7,596. 92 7,596. 92 12b Number of individuals provided OBRA premium assistance.. omplete lines 12c, 12d, and 12e only for the 2nd quarter of 20--. 12c Number of qualified employees paid exempt wages/tips March 19 31 12d Exempt wages/tips paid to qualified employees March 19 31.062 = 12e 13 Add lines 11, 12a, and 12e..................... 13 14 Balance due. If line 10 is more than line 13, enter the difference and see instructions... 14 7,596. 92 15 Overpayment. If line 13 is more than line 10, enter the difference heck one: Apply to next return. Send a refund. You MUST complete both pages of Form 941 and SIGN it. Next For Privacy Act and Paperwork Reduction Act Notice, see the back of the Payment Voucher. at. No. 17001Z Form 941 (Rev. 10-20--).. hapter 13 Accounting for Payroll and Payroll Taxes 355
13-3 WORK TOGETHER (concluded) Name (not your trade name) Part 2: Tell us about your deposit schedule and tax liability for this quarter. Employer identification number (EIN) oncept Designs 70-8418625 If you are unsure about whether you are a monthly schedule depositor or a semiweekly schedule depositor, see Pub. 15 (ircular E), section 11. 16 I L Write the state abbreviation for the state where you made your deposits OR write MU if you made your deposits in multiple states. 17 heck one: Line 10 on this return is less than $2,500 or line 10 on the return for the preceding quarter was less than $2,500, and you did not incur a $100,000 next-day deposit obligation during the current quarter. Go to Part 3. You were a monthly schedule depositor for the entire quarter. Enter your tax liability for each month and total liability for the quarter. Tax liability: Month 1 Month 2 Month 3 2,478. 92 2,538. 70 2,579. 30 7,596. 92 950210 Total liability for quarter Total must equal line 10. You were a semiweekly schedule depositor for any part of this quarter. omplete Schedule B (Form 941): Report of Tax Liability for Semiweekly Schedule Depositors, and attach it to Form 941. 356 Working Papers TE
Name Date lass 13-3 ON YOUR OWN, p. 391 Reporting withholding and payroll taxes 1. Form 941 for 20--: (Rev. October 20--) (EIN) Employer identification number Name (not your trade name) Trade name (if any) Address Employer s QUARTERLY Federal Tax Return Department of the Treasury Internal Revenue Service 7 0 8 4 1 8 6 2 5 oncept Designs 12043 Washington Street Number Street Suite or room number ity State ZIP code Read the separate instructions before you complete Form 941. Type or print within the boxes. Part 1: Answer these questions for this quarter. 1 Number of employees who received wages, tips, or other compensation for the pay period including: Mar. 12 (Quarter 1), June 12 (Quarter 2), Sept. 12 (Quarter 3), or Dec. 12 (Quarter 4) 1 2 Wages, tips, and other compensation................. 2 3 Income tax withheld from wages, tips, and other compensation........ 3 951110 OMB No. 1545-0029 Report for this Quarter of 20-- (heck one.) 1: January, February, March 2: April, May, June 3: July, August, September 4: October, November, December 4 If no wages, tips, and other compensation are subject to social security or Medicare tax heck and go to line 6e. olumn 1 5a Taxable social security wages*...124 = 5b Taxable social security tips*....124 = 5c Taxable Medicare wages & tips*..029 = 1 Naperville IL 60540-4158 olumn 2 36,02 00 4,466. 48 36,02 00 1,044. 58 5d Add olumn 2 line 5a, olumn 2 line 5b, and olumn 2 line 5c......... 5d *Report wages/tips for this quarter, including those paid to qualified new employees, on lines 5a 5c. The social security tax exemption on wages/tips will be figured on lines 6c and 6d and will reduce the tax on line 6e. 6a Number of qualified employees first paid exempt wages/tips this quarter See instructions for definitions of qualified employee and 6b Number of qualified employees paid exempt wages/tips this quarter exempt wages/tips. 6c Exempt wages/tips paid to qualified employees this quarter.062 = 6d 6e Total taxes before adjustments (line 3 + line 5d line 6d = line 6e)......... 6e 7a urrent quarter s adjustment for fractions of cents............. 7a 7b urrent quarter s adjustment for sick pay................ 7b 7c urrent quarter s adjustments for tips and group-term life insurance....... 7c 8 Total taxes after adjustments. ombine lines 6e through 7c........... 8 9 Advance earned income credit (EI) payments made to employees....... 9 10 Total taxes after adjustment for advance EI (line 8 line 9 = line 10)....... 10 11 Total deposits, including prior quarter overpayments............ 11 12a OBRA premium assistance payments (see instructions)........... 12a. 8 36,02 00 2,174. 00 5,511. 06 7,685. 06 7,685. 06 7,685. 06 7,685. 06 12b Number of individuals provided OBRA premium assistance.. omplete lines 12c, 12d, and 12e only for the 2nd quarter of 20--. 12c Number of qualified employees paid exempt wages/tips March 19 31 12d Exempt wages/tips paid to qualified employees March 19 31.062 = 12e 13 Add lines 11, 12a, and 12e..................... 13 14 Balance due. If line 10 is more than line 13, enter the difference and see instructions... 14 7,685. 06 15 Overpayment. If line 13 is more than line 10, enter the difference heck one: Apply to next return. Send a refund. You MUST complete both pages of Form 941 and SIGN it. Next For Privacy Act and Paperwork Reduction Act Notice, see the back of the Payment Voucher. at. No. 17001Z Form 941 (Rev. 10-20--).. hapter 13 Accounting for Payroll and Payroll Taxes 357
13-3 ON YOUR OWN (concluded) Name (not your trade name) Part 2: Tell us about your deposit schedule and tax liability for this quarter. Employer identification number (EIN) oncept Designs 70-8418625 If you are unsure about whether you are a monthly schedule depositor or a semiweekly schedule depositor, see Pub. 15 (ircular E), section 11. 16 I L Write the state abbreviation for the state where you made your deposits OR write MU if you made your deposits in multiple states. 17 heck one: Line 10 on this return is less than $2,500 or line 10 on the return for the preceding quarter was less than $2,500, and you did not incur a $100,000 next-day deposit obligation during the current quarter. Go to Part 3. You were a monthly schedule depositor for the entire quarter. Enter your tax liability for each month and total liability for the quarter. Tax liability: Month 1 Month 2 Month 3 2,52 46 2,616. 84 2,547. 76 7,685. 06 950210 Total liability for quarter Total must equal line 10. You were a semiweekly schedule depositor for any part of this quarter. omplete Schedule B (Form 941): Report of Tax Liability for Semiweekly Schedule Depositors, and attach it to Form 941. 358 Working Papers TE
Name Date lass 13-4 WORK TOGETHER, p. 397 Paying withholding and payroll taxes 1., 2. DATE AOUNT TITLE ASH PAYMENTS JOURNAL PAGE K. NO. POST. REF. 1 2 3 4 5 GENERAL AOUNTS PAYABLE DEBIT DEBIT PURHASES DISOUNT 20-- Apr. 15 Employee Income Tax Payable 495 1 3 2 0 00 4 6 0 6 44 1 1 Social Security Tax Payable 2 6 6 3 52 Medicare Tax Payable 6 2 2 92 30 Unemployment Tax Payable Federal 522 5 1 5 52 5 1 5 52 30 Unemployment Tax Payable State 523 1 1 5 9 92 1 1 5 9 92 2 2 3 3 4 4 5 5 14 ASH 6 6 7 7 8 8 9 9 10 10 11 11 12 12 13 13 14 14 15 15 16 16 17 17 18 18 19 19 20 20 21 21 22 22 23 23 24 24 25 25 hapter 13 Accounting for Payroll and Payroll Taxes 359
13-4 ON YOUR OWN, p. 397 Paying withholding and payroll taxes 1., 2. DATE AOUNT TITLE ASH PAYMENTS JOURNAL PAGE K. NO. POST. REF. 1 2 3 4 5 GENERAL AOUNTS PAYABLE DEBIT DEBIT PURHASES DISOUNT 20-- July 15 Employee Income Tax Payable 878 1 0 3 5 00 3 5 5 6 44 1 1 Social Security Tax Payable 2 0 4 3 52 Medicare Tax Payable 4 7 7 92 31 Unemployment Tax Payable Federal 903 5 3 2 83 5 3 2 83 31 Unemployment Tax Payable State 904 5 3 3 95 5 3 3 95 2 2 3 3 4 4 5 5 19 ASH 6 6 7 7 8 8 9 9 10 10 11 11 12 12 13 13 14 14 15 15 16 16 17 17 18 18 19 19 20 20 21 21 22 22 23 23 24 24 25 25 360 Working Papers TE
Name Date lass 13-1 APPLIATION PROBLEM (LO2), p. 401 Recording a payroll DATE AOUNT TITLE ASH PAYMENTS JOURNAL PAGE K. NO. POST. REF. 1 2 3 4 5 GENERAL AOUNTS PAYABLE DEBIT DEBIT PURHASES DISOUNT 20-- Aug. 15 Salary Expense 692 7 2 8 0 00 5 3 9 1 08 Employee Income Tax Payable 4 9 2 00 1 1 2 2 Social Security Tax Payable 4 5 1 36 Medicare Tax Payable 1 0 5 56 Medical Insurance Payable 3 9 0 00 Retirement Benefits Payable 4 5 0 00 31 Salary Expense 708 7 4 9 0 00 5 5 5 9 01 Employee Income Tax Payable 5 1 8 00 Social Security Tax Payable 4 6 4 38 Medicare Tax Payable 1 0 8 61 Medical Insurance Payable 3 9 0 00 Retirement Benefits Payable 4 5 0 00 3 3 4 4 5 5 6 6 7 7 8 8 9 9 10 10 11 11 12 12 10 ASH 13 13 14 14 15 15 16 16 17 17 18 18 19 19 20 20 21 21 22 22 23 23 24 24 25 25 hapter 13 Accounting for Payroll and Payroll Taxes 361
13-2 APPLIATION PROBLEM (LO3), p. 401 Recording employer payroll taxes 1., 2., 4. 1 2 3 4 5 6 7 8 9 Employee Name Prior Accumulated Earnings Earnings to Equal FUTA Tax Base Earnings for urrent Pay Period FUTA Earnings Prior Accumulated Earnings Earnings to Equal FUTA Tax Base Earnings for urrent Pay Period FUTA Earnings ampos, Regina P. $4,980.00 $2,020.00 $ 830.00 $ 830.00 $5,810.00 $1,190.00 $ 850.00 $ 850.00 Duran, Erica A. 5,490.00 1,510.00 915.00 915.00 6,405.00 595.00 895.00 595.00 Glover, Brandon T. 7,080.00 0.00 1,180.00 0.00 8,260.00 0.00 1,180.00 0.00 Norton, Authur S. 5,340.00 1,660.00 890.00 890.00 6,230.00 770.00 795.00 770.00 Rivas, Pearl S. 6,900.00 100.00 1,150.00 100.00 8,050.00 0.00 1,060.00 0.00 Totals $4,965.00 $2,735.00 Totals $4,780.00 $2,215.00 Social Security Tax Payable, 6.2% Medicare Tax Payable, 1.45% Unemployment Tax Payable Federal, 0.8% Unemployment Tax Payable State, 5.4% Total Payroll Taxes $ 307.83 $ 296.36 71.99 69.31 21.88 17.72 147.69 119.61 $ 549.39 $ 503.00 3., 5. GENERAL JOURNAL PAGE 5 DATE AOUNT TITLE 20-- Apr. 15 Payroll Taxes Expense M87 5 4 9 39 DO. NO. POST. REF. DEBIT 1 1 Social Security Tax Payable 3 0 7 83 Medicare Tax Payable 7 1 99 Unemployment Tax Payable Federal 2 1 88 Unemployment Tax Payable State 1 4 7 69 30 Payroll Taxes Expense M95 5 0 3 00 Social Security Tax Payable 2 9 6 36 Medicare Tax Payable 6 9 31 Unemployment Tax Payable Federal 1 7 72 Unemployment Tax Payable State 1 1 9 61 2 2 3 3 4 4 5 5 6 6 7 7 8 8 9 9 10 10 362 Working Papers TE
Name Date lass 13-3 APPLIATION PROBLEM (LO4), p. 402 Reporting withholding and payroll taxes 1. Form 941 for 20--: (Rev. October 20--) (EIN) Employer identification number Name (not your trade name) Trade name (if any) Address Employer s QUARTERLY Federal Tax Return Department of the Treasury Internal Revenue Service 7 0 7 1 5 4 8 4 5 Lance lothiers 154 N. Morgan Street Number Street Suite or room number Tampa ity State ZIP code Read the separate instructions before you complete Form 941. Type or print within the boxes. Part 1: Answer these questions for this quarter. 1 Number of employees who received wages, tips, or other compensation for the pay period including: Mar. 12 (Quarter 1), June 12 (Quarter 2), Sept. 12 (Quarter 3), or Dec. 12 (Quarter 4) 1 2 Wages, tips, and other compensation................. 2 3 Income tax withheld from wages, tips, and other compensation........ 3 951110 OMB No. 1545-0029 Report for this Quarter of 20-- (heck one.) 1: January, February, March 2: April, May, June 3: July, August, September 4: October, November, December 4 If no wages, tips, and other compensation are subject to social security or Medicare tax heck and go to line 6e. olumn 1 5a Taxable social security wages*...124 = 5b Taxable social security tips*....124 = 5c Taxable Medicare wages & tips*..029 = 1 olumn 2 29,96 00 3,715. 04 29,96 00 868. 84 5d Add olumn 2 line 5a, olumn 2 line 5b, and olumn 2 line 5c......... 5d *Report wages/tips for this quarter, including those paid to qualified new employees, on lines 5a 5c. The social security tax exemption on wages/tips will be figured on lines 6c and 6d and will reduce the tax on line 6e. 6a Number of qualified employees first paid exempt wages/tips this quarter See instructions for definitions of qualified employee and 6b Number of qualified employees paid exempt wages/tips this quarter exempt wages/tips. 6c Exempt wages/tips paid to qualified employees this quarter.062 = 6d 6e Total taxes before adjustments (line 3 + line 5d line 6d = line 6e)......... 6e 7a urrent quarter s adjustment for fractions of cents............. 7a 7b urrent quarter s adjustment for sick pay................ 7b 7c urrent quarter s adjustments for tips and group-term life insurance....... 7c 8 Total taxes after adjustments. ombine lines 6e through 7c........... 8 9 Advance earned income credit (EI) payments made to employees....... 9 10 Total taxes after adjustment for advance EI (line 8 line 9 = line 10)....... 10 11 Total deposits, including prior quarter overpayments............ 11 12a OBRA premium assistance payments (see instructions)........... 12a FL 33601-2500. 5 29,96 00 1,851. 00 4,583. 88 6,434. 88 6,434. 88 6,434. 88 6,434. 88 12b Number of individuals provided OBRA premium assistance.. omplete lines 12c, 12d, and 12e only for the 2nd quarter of 20--. 12c Number of qualified employees paid exempt wages/tips March 19 31 12d Exempt wages/tips paid to qualified employees March 19 31.062 = 12e 13 Add lines 11, 12a, and 12e..................... 13 14 Balance due. If line 10 is more than line 13, enter the difference and see instructions... 14 6,434. 88 15 Overpayment. If line 13 is more than line 10, enter the difference heck one: Apply to next return. Send a refund. You MUST complete both pages of Form 941 and SIGN it. Next For Privacy Act and Paperwork Reduction Act Notice, see the back of the Payment Voucher. at. No. 17001Z Form 941 (Rev. 10-20--).. hapter 13 Accounting for Payroll and Payroll Taxes 363
13-3 APPLIATION PROBLEM (concluded) Name (not your trade name) Part 2: Tell us about your deposit schedule and tax liability for this quarter. Employer identification number (EIN) Lance lothiers 70-7154845 If you are unsure about whether you are a monthly schedule depositor or a semiweekly schedule depositor, see Pub. 15 (ircular E), section 11. 16 F L Write the state abbreviation for the state where you made your deposits OR write MU if you made your deposits in multiple states. 17 heck one: Line 10 on this return is less than $2,500 or line 10 on the return for the preceding quarter was less than $2,500, and you did not incur a $100,000 next-day deposit obligation during the current quarter. Go to Part 3. You were a monthly schedule depositor for the entire quarter. Enter your tax liability for each month and total liability for the quarter. Tax liability: Month 1 Month 2 Month 3 2,037. 32 2,154. 38 2,243. 18 6,434. 88 950210 Total liability for quarter Total must equal line 10. You were a semiweekly schedule depositor for any part of this quarter. omplete Schedule B (Form 941): Report of Tax Liability for Semiweekly Schedule Depositors, and attach it to Form 941. 364 Working Papers TE
Name Date lass 13-4 APPLIATION PROBLEM (LO5), p. 402 Paying withholding and payroll taxes 1., 2., 3. DATE AOUNT TITLE ASH PAYMENTS JOURNAL PAGE K. NO. POST. REF. 1 2 3 4 5 GENERAL AOUNTS PAYABLE DEBIT DEBIT PURHASES DISOUNT 20-- Apr. 15 Employee Income Tax Payable 789 1 3 9 5 00 4 7 0 5 92 1 1 Social Security Tax Payable 2 6 8 3 36 2 2 Medicare Tax Payable 6 2 7 56 3 3 30 Unemployment Tax Payable Federal 822 5 0 5 44 5 0 5 44 4 4 30 Unemployment Tax Payable State 823 3 4 1 1 72 3 4 1 1 72 5 5 6 ASH 6 6 7 7 8 8 1. Social Security Tax $21,640.00 12.4% = $2,683.36 Medicare Tax $21,640.00 2.9% = $627.56 2. Federal Unemployment Tax $63,180.00 0.8% = $505.44 3. State Unemployment Tax $63,180.00 5.4% = $3,411.72 hapter 13 Accounting for Payroll and Payroll Taxes 365
13-M MASTERY PROBLEM (LO2, 3, 5), p. 403 Journalizing payroll transactions 1., 2. DATE AOUNT TITLE ASH PAYMENTS JOURNAL PAGE K. NO. POST. REF. 1 2 3 4 5 GENERAL AOUNTS PAYABLE DEBIT DEBIT PURHASES DISOUNT 20-- Jan. 15 Employee Income Tax Payable 621 7 9 0 00 2 7 1 1 68 Social Security Tax Payable 1 5 5 7 44 1 1 2 2 Medicare Tax Payable 3 6 4 24 15 Salary Expense 622 6 4 2 0 00 5 1 5 8 87 Employee Income Tax Payable 4 1 0 00 Social Security Tax Payable 3 9 8 04 Medicare Tax Payable 9 3 09 Medical Insurance Payable 3 6 0 00 15 Medical Insurance Payable 623 7 2 0 00 7 2 0 00 31 Salary Expense 661 6 8 1 0 00 5 4 8 4 03 Employee Income Tax Payable 4 4 5 00 Social Security Tax Payable 4 2 2 22 Medicare Tax Payable 9 8 75 Medical Insurance Payable 3 6 0 00 31 Unemployment Tax Payable Federal 662 4 3 20 4 3 20 31 Unemployment Tax Payable State 663 2 9 1 60 2 9 1 60 3 3 4 4 5 5 6 6 7 7 8 8 9 9 10 10 11 11 12 12 13 13 14 14 15 15 16 16 Feb. 15 Employee Income Tax Payable 687 8 5 5 00 2 8 7 9 20 Social Security Tax Payable 1 6 4 0 52 17 17 18 18 Medicare Tax Payable 3 8 3 68 15 Salary Expense 688 6 2 8 0 00 5 0 4 1 58 Employee Income Tax Payable 3 9 8 00 Social Security Tax Payable 3 8 9 36 Medicare Tax Payable 9 1 06 Medical Insurance Payable 3 6 0 00 Totals 26 1 5 5 68 3 8 2 5 52 22 3 3 0 16 19 19 20 20 21 21 22 22 23 23 24 24 25 25 14 ASH 366 Working Papers TE
Name Date lass 13-M MASTERY PROBLEM (concluded) 1. General JOURNAL PAGE 13 DATE AOUNT TITLE 20-- 1 1 Jan. 15 Payroll Taxes Expense M64 8 8 9 17 2 2 3 3 4 4 5 5 6 6 7 7 8 8 9 9 10 10 11 11 12 12 13 13 14 14 15 15 16 16 DO. NO. POST. REF. DEBIT Social Security Tax Payable 3 9 8 04 Medicare Tax Payable 9 3 09 Unemployment Tax Payable Federal 5 1 36 Unemployment Tax Payable State 3 4 6 68 31 Payroll Taxes Expense M65 9 4 3 19 Social Security Tax Payable 4 2 2 22 Medicare Tax Payable 9 8 75 Unemployment Tax Payable Federal 5 4 48 Unemployment Tax Payable State 3 6 7 74 Feb. 15 Payroll Taxes Expense M66 8 6 9 78 Social Security Tax Payable 3 8 9 36 Medicare Tax Payable 9 1 06 Unemployment Tax Payable Federal 5 0 24 Unemployment Tax Payable State 3 3 9 12 17 17 18 18 19 19 20 20 21 21 22 22 23 23 24 24 25 25 hapter 13 Accounting for Payroll and Payroll Taxes 367
13- HALLENGE PROBLEM (LO3), p. 403 Projecting employee expense 1. Salary Insurance $ 95,000.00 1,800.00 Tax Taxable Amount Tax Rate Social security $95,000.00 6.20% = 5,890.00 Medicare $95,000.00 1.45% = 1,377.50 Federal unemployment $ 7,000.00 0.80% = 56.00 State unemployment $ 7,000.00 5.40% = 378.00 Total expense for employee $104,501.50 2. Salary Insurance $ 95,000.00 1,800.00 Tax Taxable Amount Tax Rate Social security $92,000.00 6.20% = 5,704.00 Medicare $92,000.00 1.45% = 1,334.00 Federal unemployment $ 7,000.00 0.80% = 56.00 State unemployment $ 7,000.00 5.40% = 378.00 Total expense for employee $104,272.00 3. Yes, the company s total expense is reduced by $229.50 ($104,501.50 $104,272.00), the tax savings on the employee s monthly $250.00 insurance premium. The saving could also be determined by multiplying the employee contribution, $3,000.00 (12 months $250.00), by 7.65%, the sum of the social security and Medicare tax rates. 368 Working Papers TE