8
Paying the Payroll,
Depositing Payroll
Taxes, and Filing the
Required Quarterly
and Annual Tax
Forms: The
Conclusion of the
Payroll Process
ANSWERS TO DISCUSSION AND CRITICAL THINKING
QUESTIONS/ETHICAL CASE
2. Deposit the total net pay amount into the payroll account. Debit Cash-Payroll
Checking and credit Cash – Regular Checking.
4. The look-back period is the 12-month period that starts July 1 two years prior
to the tax year in question.
5. The employer is classified as a monthly or semi-weekly depositor depending
6. Unless an employer pays Form 941 taxes of less than $2,500 per quarter,
the employer must utilize the Electronic Federal Tax Payment System to
8. If deposits during the quarter equal zero, then the balance due (line 14)
equals the total taxes due after adjustments and credits (line 12).
10. Part 1, Line 1a of form 940 is used to show the state in which payments are
11. Employer “A” does not have to make a FUTA tax deposit until its liability
12. Because employer “B” has a FUTA tax liability in excess of $500.00 at this
13. The employee completes Form W-4 when starting work for a new employer
14. Using the Business Services Office found on the Social Security website, an
15. When Happy takes taxes out of its employee’s pay, it owes these to the
federal, state, and sometimes local governments. The amount due
SOLUTIONS TO CONCEPT CHECKS
1. A. January 1 – June 30, 20XA Period A
B. July 1 – December 31, 20XA Period B
2. The total of the look-back period is $67,800. Thus, Becky is classified as a
semi-weekly depositor.Her deposits will have to be made once a week on
either Wednesday or Friday.
200 A Quarter 3
$ 44,000
200 A Quarter 1
$ 67,800
3. The total of the look-back period is $61,800. Thus, Becky is classified as a
semi-weekly depositor. Her deposits will have to be made once a week on
either Wednesday or Friday.
$ 38,000
4.
Payroll Paid
Tax Paid By
November
December 15
On Saturday
Friday next week
On Sunday
Friday same week
On Monday
Friday same week
5.
Items
Account Titles
2, 5
a. FICA OASDI Payable
3, 4
b. Office Salaries Expense
SOLUTIONS TO SET A EXERCISES
8A–1.
Cash – Payroll Checking
4
5
4
5
4
Wages & Salaries Payable
4
4
8A–2.
a.
April 30
b.
August 15
c.
d.
Wednesday same week
e.
Wednesday next week
8A-3
Line
1:
Number of employees who
received wages, tips, or
other compensation
3
Line
2:
Wages, tips and other
compensation
26,980.39
3:
withheld from wages, tips
and other compensation
Line
4:
If no wages, tips and other
compensation are subject
to social security or
Medicare tax
Line
5a
Taxable social security
wages
26,980.39
X .124
3,345.57
5b
Taxable social security
tips
5c
Taxable Medicare wages
and tips
26,980.39
X .029
782.43
subject to Additional
5e
Add Column 2 from lines
4,128.00
5f
Section 3121(q) Notice and
Line
Total taxes before
6,253.00
EXERCISES (CONTINUED)
8A–4.
Dec.
15
FICA OASDI Payable
9
6
0
00
5
0
0
00
2
9
8
0
00
4
4
0
8A–5.
Line 3
Total payments to all employees
$224,000
Line 4
Payments exempt from FUTA tax
Line 6
Subtotal= Line 4 + Line 5
$196,000
Line 8
FUTA tax before adjustments
8A–6.
Total 941 payroll tax deposits paid during the look-back period are $57,294.58.
8A–7.
8A-8.
Jul.
3
FICA OASDI Payable
7
8
0
00
FICA Medicare Payable
2
2
0
00
FIT Payable
3
0
0
7
00
4
0
0
7
SUTA Payable
6
0
7
00
6
0
7
SOLUTIONS TO SET B EXERCISES
8B–1.
Cash – Payroll Checking
5
0
0
0
5
Wages & Salaries Payable
5
5
8B–2.
a.
October 31
c.
Friday same week
8B-3.
Line
1:
Number of employees
who received wages,
tips, or other
compensation
3
Line
2:
Wages, tips and other
compensation
26,800.15
Line
Federal income tax
2,025.00
tax
Line
5a
Taxable social security
wages
26,800.15
X .124
3,323.22
5b
Taxable social security
tips
5c
wages and tips
withholding
6
Total taxes before
6,125.42
Taxable Medicare
26,800.15
X .029
777.20
EXERCISES (CONTINUED)
8B–4.
May
15
FICA OASDI Payable
1
1
0
0
00
4
4
0
00
2
9
5
0
00
4
9
0
8B–5.
Line 3
Total payments to all employees
$160,000
Line 4
Payments exempt from FUTA tax
employee in excess of $7,000
Line 6
Subtotal = Line 4 + Line 5
$132,000
Line 8
FUTA tax before adjustments
8B–6.
Total 941 payroll tax deposits paid during the look-back period is $57,299.95.
8B–7.
8B–8.
Jul.
3
FICA OASDI Payable
9
0
0
00
FICA Medicare Payable
2
8
0
00
FIT Payable
3
0
0
4
00
4
1
4
SUTA Payable
6
1
3
00
6
1
3
SOLUTIONS TO SET A PROBLEMS
PROBLEM 8A-1
(1)
Jan.
31
Payroll Tax Expense
1
2
2
9
00
FICA Medicare Payable
1
2
7
75
FICA OASDI Payable
5
4
6
22
FUTA Tax Payable
5
2
86
SUTA Tax Payable
5
0
2
17
Feb.
28
Payroll Tax Expense
1
2
9
1
23
FICA Medicare Payable
1
3
7
75
FICA OASDI Payable
5
8
9
00
FUTA Tax Payable
5
3
76
SUTA Tax Payable
5
1
0
72
Mar.
31
Payroll Tax Expense
8
2
1
57
FICA Medicare Payable
1
2
5
57
FICA OASDI Payable
5
3
6
92
SUTA Tax Payable
1
4
3
93
PROBLEM 8A-1 (CONTINUED)
(2)
Feb.
15
FICA OASDI Payable
1
0
9
2
44
FICA Medicare Payable
2
5
5
50
FIT Payable
1
1
1
3
00
2
4
6
0
Mar.
15
FICA OASDI Payable
1
1
7
8
00
FICA Medicare Payable
2
7
5
50
FIT Payable
1
0
5
9
00
2
5
1
2
Deposit Form 941 Taxes
Apr.
15
FICA OASDI Payable
1
0
7
3
84
FICA Medicare Payable
2
5
1
14
FIT Payable
1
6
9
5
00
3
0
1
9
Apr.
30
SUTA Tax Payable
1
1
5
6
82
1
1
5
6
PROBLEM 8A-2
PROBLEM 8A-3
1. December OASDI tax for Paula Bush:
2.
Oct.
31
Payroll Tax Expense
7
8
1
83
FICA OASDI Payable
6
3
3
64
FICA Medicare Payable
1
4
8
19
Payroll Tax Expense
8
1
7
FICA OASDI Payable
6
6
2
16
FICA Medicare Payable
1
5
4
86
Payroll Tax Expense
8
9
5
FICA OASDI Payable
7
1
6
10
FICA Medicare Payable
1
7
9
80
3.
Nov.
15
FICA OASDI Payable
1
2
6
7
28
FICA Medicare Payable
2
9
6
38
FIT Payable
1
4
9
5
00
Cash
0
5
8
15
FICA OASDI Payable
3
2
4
32
FICA Medicare Payable
3
0
9
FIT Payable
6
2
7
3
2
6
04
2
PROBLEM 8A-3 (CONTINUED)
Jan.
31
FUTA Tax Payable (0.006 x $21,000)
1
2
6
00
PROBLEM 8A-3 (CONTINUED)
4.
PROBLEM 8A-4
Form
940 for 201X:
Em plo ye r‘sA nn ualFed eralU nem p loym e nt(FUTA )TaxR eturn
Department of the Treasury — Internal Revenue Service
850113
OMB No. 1545-0028
1a If you had to pay state unemployment tax in one state only, enter the state abbreviation . 1a
1b If you had to pay state unemployment tax in more than one state, you are a multi-state
employer . . . . . . . . . . . . . . . . . . . . . . . . . . . 1b
Check here.
Complete Schedule A (Form 940).
6
7
Total taxable FUTA wages (line 3 – line 6 = line 7). See instructions …………………..…………..………… 7
8
FUTA tax before adjustments (line 7 x 0.006 = line 8) …………….………………………..…………..………… 8
21,000. 00
126. 00
Part 3: Determine your adjustments. If any line does NOT apply, leave it blank.
9
If ALL of the taxable FUTA wages you paid were excluded from state unemployment tax,
Type of Return
(Check all that apply.)
a. Amended
b. Successor employer
c. No payments to employees in
Employer identification number
(EIN)
2
8
—
9
3
1
1
8
9
3
Name (not your trade name)
Trade name (if any)
Bill Smith
Smith’s Sporting Goods Shop
M
A
6
Subtotal (line 4 + line 5 = line 6) . . . . .
. . . .
. . . . . . . . . .
SOLUTIONS TO SET B PROBLEMS
PROBLEM 8B-1
(1)
Jan.
31
Payroll Tax Expense
1
2
5
5
50
FICA Medicare Payable
1
3
0
50
FICA OASDI Payable
5
5
8
00
FUTA Tax Payable
5
4
00
SUTA Tax Payable
5
1
3
00
Feb.
28
Payroll Tax Expense
1
2
5
4
51
FICA Medicare Payable
1
3
4
85
FICA OASDI Payable
5
7
6
60
FUTA Tax Payable
5
1
72
SUTA Tax Payable
4
9
1
34
Mar.
31
Payroll Tax Expense
8
2
7
33
FICA Medicare Payable
1
2
6
01
FICA OASDI Payable
5
3
8
78
FUTA Tax Payable
1
5
48
SUTA Tax Payable
1
4
7
06
PROBLEM 8B-1 (CONTINUED)
(2)
Feb.
15
FICA OASDI Payable
1
1
1
6
00
FICA Medicare Payable
2
6
1
00
FIT Payable
1
1
1
5
00
2
4
9
2
Mar.
15
FICA OASDI Payable
1
1
5
3
20
FICA Medicare Payable
2
6
9
70
FIT Payable
1
0
5
2
00
2
4
7
4
Apr.
15
FICA OASDI Payable
1
0
7
7
56
FICA Medicare Payable
2
5
2
02
FIT Payable
1
6
9
1
00
3
0
2
0
1
5
1
