final

a177_module_11_final_exam.xlsx

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Final Exam Instructions

Module 11 Final Exam
Step 1
You will complete the final exam in much the same way you completed the steps of the continuing payroll problem throughout the course. To begin, the hotel has a workforce of both hourly and salaried employees. Each employee is paid for hours actually worked during each week, with the time worked being recorded in quarter-hour increments. The standard workweek consists of 40 hours, with most employees being paid time and one-half for any hours worked beyond the 40 regular hours. One salaried executive, Margaret Yo, is not eligible for overtime pay. Wages are paid every Friday, with one week’s pay being held back by the company. Thus, the ﬁrst payday for North Country Hotel and Resort is January 12 for the workweek ending January 7 (Sunday). The information below will be used in preparing the payroll for the pay period ending January 7.
Employee	Hourly Wage or Salary	Hours Worked
Adams, Nikki	$16.75	42
Barr, Stephanie	$13.25	40
Duginski, Samuel	$12.50	45
Glander, Morgan	$14.90	41
Hines, Terrance	$11.85	39
Jama, Adamo	$1,055 weekly	52
Lee, Min	$3,250 monthly	40
Rorberts, Tammi	$4,204 monthly	41
Vick, Tomika	$4,640 monthly	40
Yo, Margaret	$122,000 annually
Using the payroll register for North Country Hotel and Resort, proceed as follows: 1. Record the regular hours and the overtime hours worked for each employee. 2. Complete the Regular Earnings columns and the Overtime Earnings columns for each hourly employee. For salaried workers, complete the Regular Earnings column and show the hourly overtime rate and earnings only if overtime was worked. 3. Record the Total Earnings for each employee by adding the Regular Earnings and the Overtime Earnings. Calculate the weekly rate for Margaret Yo who does not earn overtime.
Step 2
You will now input non-tax withholdings for each employee, proceeding as follows: 1. Record the payroll deductions for the 401k/Simple plan, the Health plan, and the Group life plan that the employer has established for participating employees. All of the employees are participating, and their weekly contributions are listed below. For future reference, the tax deferral on the Health plan and the 401k/Simple deductions applies only to the federal income tax.			No.	Employee	401k	Group	Health
			300	Adams, Nikki	$ 25.00	$ 11.00	$ 55.00
			111	Barr, Stephanie	$ 38.00	$ 11.00	$ 55.00
			208	Duginski, Samuel	$ 52.00	$ 11.00	$ 105.00
			198	Glander, Morgan	$ 28.00	$ 11.00	$ 105.00
			189	Hines, Terrance	$ 40.00	$ 11.00	$ 105.00
			68	Jama, Adamo	$ 75.00	$ 16.00	$ 55.00
			45	Lee, Min	$ 60.00	$ 16.00	$ 105.00
			17	Rorberts, Tammi	$ 55.00	$ 16.00	$ 55.00
			12	Vick, Tomika	$ 66.00	$ 16.00	$ 105.00
			9	Yo, Margaret	$ 125.00	$ 21.00	$ 105.00
Step 3
You will now determine the employee and employer FICA taxes for the pay period ending January 7. 1. In the Taxable Earnings columns, record the amount of each employee’s weekly earnings that is subject to FICA taxes. 2. Using the taxable earnings, compute the OASDI (6.3%) and HI (.85%) taxes for each employee and record in the appropriate column. Note: Keep your partially completed payroll register for use in the next module. 3. Below the worksheet, in the space provided, use the total wages to calculate the employer's FICA obligation. Note the employer's FICA taxes will be used in step 8 for the journal entry.
Step 4
You will now determine the amount of income tax to withhold for each employee, proceeding as follows: 1. In the appropriate columns of your payroll register, record the marital status and number of withholding allowances claimed for each employee, using the information provided. 2. Record the amount of federal income taxes using the wage-bracket method. Recall that the 401K and the health plan are both pre-tax deductions. The tax deferral on these deductions applies only to the federal income tax. Use the wage-bracket method to determine the federal income taxes to withhold from the wages and salaries of each employee. Use the wage brackets found in the Publication 15 PDF file provided with the exam file.								Marital	Allow-
						No.	Employee	Status	ances
						300	Adams, Nikki	S	2
						111	Barr, Stephanie	S	1
						208	Duginski, Samuel	M	3
						198	Glander, Morgan	M	5
						189	Hines, Terrance	M	4
						68	Jama, Adamo	S	0
						45	Lee, Min	M	8
						17	Rorberts, Tammi	S	2
						12	Vick, Tomika	M	6
						9	Yo, Margaret	M	4
Step 5
You will now determine the amount of state and city income tax to withhold for each employee, proceeding as follows: 1. Record the state income taxes on the gross weekly earnings for each employee. For this exercise, assume the rate is 2% for the state of Minnesota. In reality, tax tables are used in Minnesota that are much like the federal tax tables used last week. 2. Record the city income taxes on the gross weekly earnings of each employee. Assume the rate is 1% for the city of Minneapolis residents. In reality, Minneapolis does not impose an income tax.
Step 6
You will now compute the employer’s liability for federal unemployment taxes (FUTA) for the pay of January 12. These computations will be used in step 8 for recording the payroll tax entries. To compute the employer’s liability for federal unemployment taxes, proceed as follows: 1. Enter each employee’s gross earnings in the Taxable Earnings—FUTA column. 2. Total the Taxable Earnings—FUTA column. 3. At the bottom of your payroll register, assuming a rate of .66%, compute the Net FUTA tax. Since this is the ﬁrst pay period of the year, none of the employees are near the $7,000 ceiling; therefore, each employee’s gross earnings are subject to the FUTA tax.
Step 7
You will now compute the employee and employer liability for state unemployment taxes (SUTA) for the pay of January 12. These computations will be used in step 8 for recording the payroll tax entries. To compute the employer liability for federal unemployment taxes, proceed as follows: 1. Enter each employee’s gross earnings in the Taxable Earnings—SUTA column. 2. Total the Taxable Earnings—SUTA column. 3. At the bottom of your payroll register, assuming a rate of 5.75%, compute the SUTA tax. Minnesota does not limit the amount of wages subject to SUTA, so all wages are subject to SUTA tax. Assume that employees are subject to a SUTA rate of .7%. In reality, however, Minnesota does not impose a SUTA tax on employees.
Step 8
In this last step of the final exam, you will calculate the net pay for each employee. 1. Determine the net pay for each employee. 2. Foot all money columns of the payroll register, and prove the accuracy of the column totals. 3. Prepare the journal entries as of January 07 to record the payroll and the payroll taxes for the week. Also prepare the journal entry to record the payment of the payroll on January 12 when the paychecks are distributed to all workers.

Final Exam Worksheet

Final Exam Worksheet
North Country Hotel and Resort
Payroll Register
For the Period Ending: Jan. 07, 20XX
No.	Employee	Marital Status	Allow.	Regular Earnings			Overtime Earnings				Deductions									Net Pay		Taxable Earnings							OASDI	HI	FIT	SIT	SUTA	CIT	SIMPLE	GROUP	HEALTH	Net
				Hours	Hourly Rate	Earnings	Hours	Hourly Rate	Earnings	Total Earnings	Group Life	Health Plan	401K / Simple	FICA		FIT	SIT	CIT	SUTA	Check No.	Amount	OASDI	HI	FUTA	SUTA				0.062	0.0145		0.0307	0.0007	0.03		INS	INS	pay	oasdi	hi	futa	suta
														OASDI	HI
300	Adams, Nikki																			21313						300		300	18.60 Mark Sears: Enter as a formula of taxable earnings x OASDI rate	4.35 Mark Sears: Enter as a formula of taxable earnings x HI rate	17.00	9.21	0.21	9.00	20.00	0.85	1.65	219.13	300.00	300.00	300.00	300.00
111	Barr, Stephanie																			21314						290	87.04	377.04	23.38	5.47	34.00	11.58	0.26	11.31	50.00	0.85	1.65	238.55	377.04	377.04	377.04	377.04
208	Duginski, Samuel																			21315						303.75		303.75	18.83	4.40	- 0	9.33	0.21	9.11	40.00	0.85	1.65	219.36	303.75	303.75	303.75	303.75
198	Glander, Morgan																			21316						316	71.1	387.1	24.00	5.61	- 0	11.88	0.27	11.61	50.00	0.85	1.65	281.22	387.10	387.10	387.10	387.10
189	Hines, Terrance																			21317						390		390	24.18	5.66	19.00	11.97	0.27	11.70	20.00	- 0	1.65	295.57	390.00	390.00	390.00	390.00
68	Jama, Adamo																			21318						515	24.15	539.15	33.43	7.82	11.00	16.55	0.38	16.17	40.00	0.85	1.65	411.30	539.15	539.15	539.15	539.15
45	Lee, Min																			21319						392.31		392.31	24.32	5.69	- 0	12.04	0.27	11.77	50.00	0.85	1.65	285.71	392.31	392.31	392.31	392.31
17	Rorberts, Tammi																			21320						542.31		542.31	33.62	7.86	47.00	16.65	0.38	16.27	60.00	- 0	1.65	358.88	542.31	542.31	542.31	542.31
12	Vick, Tomika																			21321						348.46	52.28	400.74	24.85	5.81	- 0	12.30	0.28	12.02	30.00	0.85	1.65	312.98	400.74	400.74	400.74	400.74
9	Yo, Margaret																			21322						1000		1000	62.00	14.50	24.00	30.70	0.70	30.00	80.00	0.85	1.65	755.60	1,000.00	1,000.00	1,000.00	1,000.00
	Totals																									4,397.83 Mark Sears: Enter as formula totaling column	234.57 Mark Sears: Enter as formula totaling column	4,632.40 Mark Sears: Enter as formula totaling column	287.21 Mark Sears: Enter as formula totaling column	67.17 Mark Sears: Enter as formula totaling column	152.00 Mark Sears: Enter as formula totaling column	142.21 Mark Sears: Enter as formula totaling column	3.24 Mark Sears: Enter as formula totaling column	138.97 Mark Sears: Enter as formula totaling column	440.00 Mark Sears: Enter as formula totaling column	6.80 Mark Sears: Enter as formula totaling column	16.50 Mark Sears: Enter as formula totaling column	3,378.29 Mark Sears: Enter as formula totaling column	4,632.40 Mark Sears: Enter as formula totaling column	4,632.40 Mark Sears: Enter as formula totaling column	4,632.40 Mark Sears: Enter as formula totaling column	4,632.40 Mark Sears: Enter as formula totaling column
																													Mark Sears: Enter as a formula of taxable earnings x OASDI rate	Mark Sears: Enter as a formula of taxable earnings x HI rate	Mark Sears: Enter as formula totaling column	Mark Sears: Enter as formula totaling column		Mark Sears: Enter as formula totaling column	Mark Sears: Enter as formula totaling column	Mark Sears: Enter as formula totaling column	Mark Sears: Enter as formula totaling column	Mark Sears: Enter as formula totaling column	Journal
		Date		Account					Debit	Credit						Taxable		OASDI
																Earnings	Rate	Tax
		01/07/20XX		Salaries and Wages Expense											OASDI												4,632.40
				Employee FIT Payable																								287.21
				Employee SIT Payable														HI Tax										67.17					Taxable
				Empoyee SUTA Payable											HI													152.00					Earnings	Rate	Net FUTA
				Employee CIT Payabale																								142.21					4,632.40	0.006	27.79
				FICA - OASDI Payable																								3.24							SUTA
				FICA - HI Payable														FUTA Tax										138.97					4,632.40	0.036785	170.40
				401K Contributions Payable											FUTA													440.00
				Group Insurance Premiums Payable																								6.80
				Health Insurance Premiums Payable														SUTA Tax										16.50
				Salaries and Wages Payable											SUTA													3,378.29
		01/07/20XX		Payroll Taxes Expense																							552.58
				FICA - OASDI Payable																								287.21
				FICA - HI Payabale																								67.17
				FUTA Taxes Payable																								27.79
				SUTA Taxes Payable																								170.40
		01/14/20XX		Salaries and Wages Payable																							3,378.29
				Cash																								3,378.29