Accounting Chapter 13 Homework 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

Study

Guide

13

Name Perfect

Score

Your

Score

Analyzing Payroll Records 15 Pts.

Analyzing Transactions Affecting Payroll 5 Pts.

Analyzing Form W-2 10 Pts.

Total 30 Pts.

Part One—Analyzing Payroll Records

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

(C) 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 (C) Earnings Regular, Earnings

Overtime, and Deductions Total columns (D) Total Earnings, Earnings Regular, and

Earnings Overtime Total columns. (p. 379)

6. When a semimonthly payroll is paid, the credit to Cash is equal to the (A) total earnings

of all employees (B) total deductions for income tax and social security tax (C) total

deductions (D) net pay of all employees. (p. 380)

7. Employer payroll taxes are (A) assets (B) expenses (C) 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

(C) 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 (C) 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 (C) federal 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 (C) FUTA earnings (D) accumulated earnings. (p. 383)

Answers

1.

2.

6.

7.

8.

9.

10.

11.

C

A

D

B

C

D

C

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 Credit

A. Cash 1. Paid cash for semimonthly

payroll. (p. 380)

B. Employee Income Tax

Payable

2. Recorded employer payroll

taxes expense. (p. 384)

C. Health Insurance

Premiums Payable

3. Paid cash for liability for employee

income tax, social security tax, and

Medicare tax. (p. 394)

G

E

B, H, D

B, H, D, C, F, A

A

H, D, I, J

Name Date Class

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)

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

Answers

1.

2.

3.

4.

5.

30,273.75 1,876.97

ThreeGreen Products, Inc.

1501 Commerce Street

Carlisle, PA 17013

30,273.75 438.97

31-0429632

194-81-5823

30,273.75 620.00

22222 a Employee’s social security number

OMB No. 1545-0008

b Employer identification number (EIN)

c Employer’s name, address, and ZIP code

d Control number

1 Wages, tips, other compensation

2 Federal income tax withheld

3 Social security wages 4 Social security tax withheld

5 Medicare wages and tips 6 Medicare tax withheld

7 Social security tips 8 Allocated tips

9 10 Dependent care benefits

F

T

F

Across

5. The total of gross earnings for all employees

Down

1. A state tax paid by employers that is used to pay

2

5

3

1

4

2

5

3

1

4

D

E

P

O

SALA

C

O

N

T

W

A

G

RYEXPE

NS E

N

U

E

T

A

T

S

Name Date Class

13-1 WORK TOGETHER, p. 381

1.

Salary Expense

Employee Income Tax Payable

2.

CASH PAYMENTS JOURNAL PAGE

1 2 3 4 5

DATE ACCOUNT TITLE CK.

NO.

POST.

REF.

GENERAL ACCOUNTS

PAYABLE

DEBIT

PURCHASES

DISCOUNT

CREDIT

CASH

CREDIT

DEBIT CREDIT

1 1

2 2

Recording a payroll

13,800.00

925.00

6

20–

May 15 Salary Expense 564 13 8 0 0 00 11 8 1 9 30

Employee Income Tax Payable 9 2 5 00

23148_ch13_hr_349-392.indd 353 1/18/18 1:29 AM

354 • Working Papers

13-1 ON YOUR OWN, p. 381

1.

Salary Expense

Employee Income Tax Payable

2.

CASH PAYMENTS JOURNAL PAGE

1 2 3 4 5

DATE ACCOUNT TITLE CK.

NO.

POST.

REF.

GENERAL ACCOUNTS

PAYABLE

DEBIT

PURCHASES

DISCOUNT

CREDIT

CASH

CREDIT

DEBIT CREDIT

1 1

2 2

6 6

Recording a payroll

TE

15,640.00

1,015.00

8

20–

June 30 Salary Expense 776 15 6 4 0 00 13 4 2 8 54

Employee Income Tax Payable 1 0 1 5 00

23148_ch13_hr_349-392.indd 354 1/18/18 1:29 AM

Name Date Class

13-2 WORK TOGETHER, p. 386

GENERAL JOURNAL PAGE

DATE ACCOUNT TITLE DOC.

NO.

POST.

REF. DEBIT CREDIT

7 7

8 8

9 9

Recording employer payroll taxes

1., 2.

3.

1 2345

Employee Name

Prior

Accumulated

Earnings

Earnings to

Equal FUTA

Tax Base

Earnings for

Current Pay

Period

FUTA

Earnings

Ellis, Nick C. $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

15 Payroll Taxes Expense M46 3 3 2 45

Social Security Tax Payable 1 9 7 10

Medicare Tax Payable 4 6 10

$ 762.50

0.00

527.00

10

356 • Working Papers

13-2 ON YOUR OWN, p. 386

Recording employer payroll taxes

1., 2.

3.

1 2345

Employee Name

Prior

Accumulated

Earnings

Earnings to

Equal FUTA

Tax Base

Earnings for

Current Pay

Period

FUTA

Earnings

Holt, Stephanie L. $6,380.00 $ 620.00 $ 653.00

Klein, Jacob S. 3,840.00 3,160.00 521.00

GENERAL JOURNAL PAGE

DATE ACCOUNT TITLE DOC.

NO.

POST.

REF. DEBIT CREDIT

7 7

8 8

TE

$ 620.00

15 Payroll Taxes Expense M97 3 0 1 94

Social Security Tax Payable 1 5 6 52

12

23148_ch13_hr_349-392.indd 356 1/18/18 1:29 AM

Name Date Class

13-3 WORK TOGETHER, p. 391

Reporting withholding and payroll taxes

1.

Form

941 for 20–:

(Rev. October 20–)

Employer’s QUARTERLY Federal Tax Return

Department of the Treasury — Internal Revenue Service

951110

OMB No. 1545-0029

(EIN)

Employer identification number

—

Name (not your trade name)

Trade name (if any)

Address

Number Street Suite or room number

City State ZIP code

Report for this Quarter of 20–

(Check one.)

1: January, February, March

2: April, May, June

3: July, August, September

4: October, November, December

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

4 If no wages, tips, and other compensation are subject to social security or Medicare tax Check and go to line 6e.

6a

Number of qualified employees first paid exempt wages/tips this quarter

See instructions for definitions of

qualified employee and

exempt wages/tips.

6b

Number of qualified employees paid exempt wages/tips this quarter

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 Current quarter’s adjustment for fractions of cents ………….7a

7b Current quarter’s adjustment for sick pay ……………. 7b

7c

Current quarter’s adjustments for tips and group-term life insurance …….

7c

8 Total taxes after adjustments. Combine lines 6e through 7c ………..8

9 Advance earned income credit (EIC) payments made to employees …….9

10 Total taxes after adjustment for advance EIC (line 8 – line 9 = line 10) …….10

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. Cat. No. 17001Z

Form

941

(Rev. 10-20–)

1

.

Concept Designs

12043 Washington Street

Naperville IL 60540-4158

70 8 41 8 62 5

35,640 00

7,596 92

0

2,144 00

8

✔

13-3 WORK TOGETHER (concluded)

950210

Name

(not your trade name) Employer identification number (EIN)

Part 2: Tell us about your deposit schedule and tax liability for this quarter.

If you are unsure about whether you are a monthly schedule depositor or a semiweekly schedule depositor, see Pub. 15

(Circular E), section 11.

16

Write the state abbreviation for the state where you made your deposits OR write “MU” if you made your

deposits in multiple states.

17 Check 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.

IL

Concept Designs 70-8418625

13-3 ON YOUR OWN, p. 391

Reporting withholding and payroll taxes

1.

Form

941 for 20–:

(Rev. October 20–)

Employer’s QUARTERLY Federal Tax Return

Department of the Treasury — Internal Revenue Service

951110

OMB No. 1545-0029

(EIN)

Employer identification number

—

Name (not your trade name)

Trade name (if any)

Address

Number Street Suite or room number

City State ZIP code

Report for this Quarter of 20–

(Check one.)

1: January, February, March

2: April, May, June

3: July, August, September

4: October, November, December

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

4 If no wages, tips, and other compensation are subject to social security or Medicare tax Check and go to line 6e.

2 nmuloC1 nmuloC *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.

5a Taxable social security wages* .. × .124 =

5bTaxable social security tips*. .. × .124 =

5cTaxable Medicare wages & tips* . × .029 =

7a Current quarter’s adjustment for fractions of cents ………….7a

7b Current quarter’s adjustment for sick pay ……………. 7b

7c

Current quarter’s adjustments for tips and group-term life insurance …….

7c

8 Total taxes after adjustments. Combine lines 6e through 7c ………..8

9 Advance earned income credit (EIC) payments made to employees …….9

10 Total taxes after adjustment for advance EIC (line 8 – line 9 = line 10) …….10

11 Total deposits, including prior quarter overpayments .……….. 11

12a COBRA premium assistance payments (see instructions) ………..

12a

1

. .

.

70 8 418 6 25

Concept Designs

12043 Washington Street

Naperville IL 60540-4158

8

36,020 00

2,174 00

36,020 00

4,466 48

1,044 58

7,685 06

0

✔

13-3 ON YOUR OWN (concluded)

950210

Name

(not your trade name) Employer identification number (EIN)

Part 2: Tell us about your deposit schedule and tax liability for this quarter.

If you are unsure about whether you are a monthly schedule depositor or a semiweekly schedule depositor, see Pub. 15

(Circular E), section 11.

16

Write the state abbreviation for the state where you made your deposits OR write “MU” if you made your

deposits in multiple states.

17 Check 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

Concept Designs 70-8418625

I L

✔

Name Date Class

13-4 WORK TOGETHER, p. 397

CASH PAYMENTS JOURNAL PAGE

12345

DATE ACCOUNT TITLE CK.

NO.

POST.

REF.

GENERAL ACCOUNTS

PAYABLE

DEBIT

PURCHASES

DISCOUNT

CREDIT

CASH

CREDIT

DEBIT CREDIT

1 1

2 2

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

Paying withholding and payroll taxes

1., 2.

20–

Apr. 15 Employee Income Tax Payable 495 1 3 2 0 00 4 6 0 6 44

Social Security Tax Payable 2 6 6 3 52

14

23148_ch13_hr_349-392.indd 361 1/18/18 1:29 AM

362 • Working Papers

13-4 ON YOUR OWN, p. 397

Paying withholding and payroll taxes

1., 2.

CASH PAYMENTS JOURNAL PAGE

12345

DATE ACCOUNT TITLE CK.

NO.

POST.

REF.

GENERAL ACCOUNTS

PAYABLE

DEBIT

PURCHASES

DISCOUNT

CREDIT

CASH

CREDIT

DEBIT CREDIT

1 1

2 2

3 3

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

TE

19

20–

July 15 Employee Income Tax Payable 878 1 0 3 5 00 3 5 5 6 44

Social Security Tax Payable 2 0 4 3 52

Medicare Tax Payable 4 7 7 92

23148_ch13_hr_349-392.indd 362 1/18/18 1:29 AM

Name Date Class

13-1 APPLICATION PROBLEM (LO2), p. 401

CASH PAYMENTS JOURNAL PAGE

12345

DATE ACCOUNT TITLE CK.

NO.

POST.

REF.

GENERAL ACCOUNTS

PAYABLE

DEBIT

PURCHASES

DISCOUNT

CREDIT

CASH

CREDIT

DEBIT CREDIT

1 1

2 2

3 3

4 4

5 5

6 6

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

Recording a payroll

10

20–

Aug. 15 Salary Expense 692 7 2 8 0 00 5 3 9 1 08

Employee Income Tax Payable 4 9 2 00

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

23148_ch13_hr_349-392.indd 363 1/18/18 1:29 AM

364 • Working Papers

13-2 APPLICATION 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

Current Pay

Period

FUTA

Earnings

Prior

Accumulated

Earnings

Earnings to

Equal FUTA

Tax Base

Earnings for

Current Pay

Period

FUTA

Earnings

Campos, Regina P. $4,980.00 $ 830.00 $ 850.00

3., 5.

GENERAL JOURNAL PAGE

DATE ACCOUNT TITLE DOC.

NO.

POST.

REF. DEBIT CREDIT

1 1

2 2

3 3

4 4

5 5

TE

$2,020.00 $ 830.00 $5,810.00 $1,190.00 $ 850.00

5

20–

Apr. 15 Payroll Taxes Expense M87 5 4 9 39

Social Security Tax Payable 3 0 7 83

Medicare Tax Payable 7 1 99

Unemployment Tax Payable—Federal 2 1 88

23148_ch13_hr_349-392.indd 364 1/18/18 1:29 AM

Name Date Class

13-3 APPLICATION PROBLEM (LO4), p. 402

Reporting withholding and payroll taxes

1.

Form

941 for 20–:

(Rev. October 20–)

Employer’s QUARTERLY Federal Tax Return

Department of the Treasury — Internal Revenue Service

951110

OMB No. 1545-0029

(EIN)

Employer identification number

—

Name (not your trade name)

Trade name (if any)

Address

Number Street Suite or room number

City State ZIP code

Report for this Quarter of 20–

(Check one.)

1: January, February, March

2: April, May, June

3: July, August, September

4: October, November, December

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

4 If no wages, tips, and other compensation are subject to social security or Medicare tax Check and go to line 6e.

2 nmuloC1 nmuloC *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

5a Taxable social security wages* .. × .124 =

5bTaxable social security tips*. .. × .124 =

5cTaxable Medicare wages & tips* . × .029 =

7c

Current quarter’s adjustments for tips and group-term life insurance …….

7c

8 Total taxes after adjustments. Combine lines 6e through 7c ………..8

9 Advance earned income credit (EIC) payments made to employees …….9

10 Total taxes after adjustment for advance EIC (line 8 – line 9 = line 10) …….10

11 Total deposits, including prior quarter overpayments .……….. 11

12a COBRA premium assistance payments (see instructions) ………..

12a

12b Number of individuals provided COBRA premium assistance .. Complete lines 12c, 12d, and 12e

1

. .

.

Lance Clothiers

FL

5

1,851 00

0

6,434 88

29,960 00

29,960 00 3,715 04

868 84

29,960 00

0 0

33601-2500

Tampa

154 N. Morgan Street

7071 5 48 4 5

✔

13-3 APPLICATION PROBLEM (concluded)

950210

Name

(not your trade name) Employer identification number (EIN)

Part 2: Tell us about your deposit schedule and tax liability for this quarter.

If you are unsure about whether you are a monthly schedule depositor or a semiweekly schedule depositor, see Pub. 15

(Circular E), section 11.

16

Write the state abbreviation for the state where you made your deposits OR write “MU” if you made your

deposits in multiple states.

17 Check 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

Lance Clothiers 70-7154845

FL

✔

Name Date Class

13-4 APPLICATION PROBLEM (LO5), p. 402

1., 2., 3.

CASH PAYMENTS JOURNAL PAGE

12345

DATE ACCOUNT TITLE CK.

NO.

POST.

REF.

GENERAL ACCOUNTS

PAYABLE

DEBIT

PURCHASES

DISCOUNT

CREDIT

CASH

CREDIT

DEBIT CREDIT

1 1

2 2

3 3

Paying withholding and payroll taxes

6

20–

Apr. 15 Employee Income Tax Payable 789 1 3 9 5 00 4 7 0 5 92

Social Security Tax Payable 2 6 8 3 36

Medicare Tax Payable 6 2 7 56

1. Social Security Tax $21,640.00 × 12.4% = $2,683.36

Medicare Tax $21,640.00 × 2.9% = $627.56

23148_ch13_hr_349-392.indd 367 1/18/18 1:29 AM

368 • Working Papers

13-M MASTERY PROBLEM (LO2, 3, 5), p. 403

1., 2.

CASH PAYMENTS JOURNAL PAGE

12345

DATE ACCOUNT TITLE CK.

NO.

POST.

REF.

GENERAL ACCOUNTS

PAYABLE

DEBIT

PURCHASES

DISCOUNT

CREDIT

CASH

CREDIT

DEBIT CREDIT

1 1

2 2

3 3

4 4

5 5

6 6

7 7

8 8

9 9

10 10

11 11

12 12

Journalizing payroll transactions

TE

14

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

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

23148_ch13_hr_349-392.indd 368 1/18/18 1:29 AM