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 Table Appendix C, Page 270, Table #3
  Federal Unemployment Rate (Federal unemployment rate less Section 125 health insurance) 6.0% 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
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 244,750.00



Utilities Payable
Total Liabilities 337,240.00
Owners’ Equity 1,250,000.00
Retained Earnings
Total Equity





Total Liabilities and Equity 1,587,240.00



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