December 31 is the end of the final pay period for the month of December. Employee pay will be dispersed on January 3. The company pays for the day before and the day of Christmas, and if the holiday is on a weekend, the company pays for the Friday before. Christmas fell on a Tuesday, so employees will be paid for both the Monday and Tuesday as holiday pay. (Employees worked extra hours on Saturday during the week of 12/23-12/29. Remember, holidays and vacations do not incur overtime if the employee does not work more than 8 hours in a day.) 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 employees are paid by check). Date the checks 1/3/1X (next year).
Complete the General Journal entries as follows:
31-Dec Journalize employee pay including the issuance of paychecks (use one entry for all checks)
31-Dec Journalize employer payroll tax for the December 31 pay date
03-Jan Journalize remittance of 401(k) and health insurance premiums deducted
03-Jan Journalize remittance of monthly payroll taxes
03-Jan Journalize payment of payroll to employees
Update the Employee Earnings records for the period’s pay and the new 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 Dollars). Be sure to capitalize the letters as shown. Enter all dates in mm/dd/yy format where year is entered as 1X.
rev: 03_30_2016_QC_CS-46759, 07_09_2016_QC_CS-52845, 07_13_2016_QC_CS-52845
eBook & Resources
WorksheetLearning Objective: 04-02 Determine Federal Income Tax Withholding AmountsLearning Objective: 05-05 Relate Labor Expenses to Company Profitability
Difficulty: 2 MediumLearning Objective: 04-03 Compute Social Security and Medicare Tax WithholdingLearning Objective: 05-06 Complete Benefit Analysis as a Function of Payroll
Learning Objective: 01-06 Differentiate between Exempt and Nonexempt WorkersLearning Objective: 04-04 Apply State and Local Income TaxesLearning Objective: 06-01 Create a Payroll Register
Learning Objective: 02-02 Prepare Required Employee DocumentationLearning Objective: 04-05 Explain Post-Tax DeductionsLearning Objective: 06-02 Transfer Payroll Data to the Employees’ Earnings Records
Learning Objective: 03-01 Analyze Minimum Wage Pay for Nonexempt WorkersLearning Objective: 04-06 Analyze Employee Net PayLearning Objective: 06-03 Describe Financial Accounting Concepts
Learning Objective: 03-02 Compute Gross Pay for Different Pay BasesLearning Objective: 04-07 Discuss Employee Pay MethodsLearning Objective: 06-04 Complete Payroll-Related General Journal Entries
Learning Objective: 03-03 Calculate Pay Based on Hours and Fractions of HoursLearning Objective: 05-01 List Employer-Paid and Employee-Paid ObligationsLearning Objective: 06-05 Generate Payroll-Related General Ledger Entries
Learning Objective: 03-04 Apply Combination Pay MethodsLearning Objective: 05-02 Discuss Reporting Periods and Requirements for Employer Tax DepositsLearning Objective: 06-06 Describe Payroll Effects on the Accounting System
Learning Objective: 03-05 Explain Special Pay SituationsLearning Objective: 05-03 Prepare Mid-Year and Year-End Employer Tax Reporting and DepositsLearning Objective: 06-07 Explain Payroll Entries in Accounting Reports
Learning Objective: 04-01 Identify Pre-Tax DeductionsLearning Objective: 05-04 Describe Payroll Within the Context of Business Expenses
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