Chapter 14 – Payroll Accounting, Taxes, & Reports Accounting I Chapter 14 – Payroll Accounting, Taxes, & Reports

Lesson 14-1 PAYROLL REGISTER Lesson 14-1, page 332

ANALYZING PAYMENT OF PAYROLL Lesson 14-1, page 333

JOURNALIZING PAYMENT OF A PAYROLL December 15. Paid cash for semimonthly payroll, $2989.02 (total payroll, $3,803.75, less deductions: employee income tax, $273.00; social security tax, $247.26; Medicare tax, $57.07; health insurance premiums, $182.40; U.S. Savings Bonds, $35.00; United Way donations, $20.00). Check No. 312. Accounts Affected Salary Expense Employee Income Tax Payable Social Security Tax Payable Medicare Tax Payable Health Insurance Premiums Payable U.S. Savings Bond Payable United Way Donations Payable Cash Classification Expense Liability Asset Change Increased Decreased Entered Debit side Credit side Lesson 14-1, page 334

JOURNALIZING PAYMENT OF A PAYROLL 4 2 5 3 1 6 7 1. Write the date. 2. Write the title of the account debited. 3. Write the check number. 4. Write the amount debited to Salary Expense. 5. Write the amount credited to Cash. 6. Write the titles of the accounts credited. 7. Write the credit amounts. Lesson 14-1, page 334

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TERMS REVIEW federal unemployment tax state unemployment tax Lesson 14-2, page 340

TERMS REVIEW Federal Unemployment Tax A federal tax used for state & federal administrative expenses of the unemployment program. Lesson 14-2, page 338

TERMS REVIEW State Unemployment Tax A state tax used to pay benefits to unemployed workers. Lesson 14-2, page 338

UNEMPLOYMENT TAXABLE EARNINGS Lesson 14-1 UNEMPLOYMENT TAXABLE EARNINGS 2 1 1 3 1. Enter accumulated earnings and total earnings for each employee. 2. Enter unemployment taxable earnings. 3. Total the unemployment taxable earnings column. Lesson 14-2, page 337

        UNEMPLOYMENT TAXES Calculate Unemployment Taxes—Federal     Unemployment Federal Federal Taxable Unemployment Unemployment Earnings  Tax Rate = Tax $183.75  0.8% = $1.47 Calculate Unemployment Taxes—State     Unemployment State State Taxable Unemployment Unemployment Earnings  Tax Rate = Tax $183.75  5.4% = $9.92 Lesson 14-2, page 338

JOURNALIZING EMPLOYER PAYROLL TAXES December 15. Recorded employer payroll taxes expense, $315.72, for the semimonthly pay period ended Dec. 15. Taxes owed are: social security tax, $247.26; Medicare tax, $57.07; federal unemployment tax, $1.47; state unemployment tax, $9.92. Memorandum No. 63. Accounts Affected Payroll Taxes Expense Soc. Security Tax Pay. Medicare Tax Payable Unemp. Tax Pay.—Fed. Unemp. Tax Pay.—State Classification Expense Liability Change Increased Entered Debit side Credit side Payroll Taxes Expense Social Security Tax Payable Medicare Tax Payable normal balance normal balance normal balance  315.72  57.07  247.26 Unemployment Tax Payable—Federal Unemployment Tax Payable—State normal balance normal balance   1.47 9.92 Lesson 14-2, page 339

JOURNALIZING EMPLOYER PAYROLL TAXES 2 3 4 1 6 5 1. Write the date. 2. Write the expense account debited. 3. Write the memorandum number. 4. Write the debit amount. 5. Write the titles of the liability accounts credited. 6. Write the credit amounts. Lesson 14-2, page 339

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EMPLOYER ANNUAL REPORT TO EMPLOYEES OF TAXES WITHHELD Lesson 14-3, page 341

EMPLOYER’S QUARTERLY FEDERAL TAX RETURN 1. Heading 2. Number of Employees 1 3. Total Quarterly Earnings 4. Income Tax Withheld 5. Employee and Employer Social Security and Medicare Taxes 2 3 4 6. Social Security plus Medicare Taxes 5 6 7. Total Taxes 7 8. Total Taxes for Each Month 9. Total Taxes 8 9 Lesson 14-3, page 342

PREPARING EMPLOYER’S QUARTERLY FEDERAL TAX RETURN Calculate Social Security and Medicare Taxes     Total Earnings  Tax Rate = Tax Social Security $22,575.00  13% = $2,934.75 Medicare $22,575.00 3% = $ 677.25 Calculate Social Security and Medicare Taxes     Employee Employer Social Social Federal Income Security and Security and Federal Tax Tax Withheld + Medicare Tax + Medicare Tax = Liability Dec. 1-15 $273.00 + $304.33 + $304.33 = 881.66 Dec. 16-31 $269.00 + 302.08 + $302.08 = $873.16 Totals $542.00 + 606.41 + 606.41 = $1,754.82 Lesson 14-3, page 343

EMPLOYER ANNUAL REPORTING OF PAYROLL TAXES Lesson 14-3, page 344

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FORM 8109, FEDERAL DEPOSIT COUPON Lesson 14-1 FORM 8109, FEDERAL DEPOSIT COUPON Lesson 14-4, page 347

JOURNALIZING PAYMENT OF LIABILITY FOR EMPLOYEE INCOME TAX, SOCIAL SECURITY TAX, AND MEDICARE TAX January 15. Paid cash for liability for employee income tax, $542.00; social security tax, $985.40; and Medicare tax, $227.42; total, $1,754.82. Check No. 330. Accounts Affected Employee Inc. Tax Pay. Social Security Tax Pay. Medicare Tax Payable Cash Classification Liability Asset Change Decreased Entered Debit side Credit side Cash Medicare Tax Payable Social Security Tax Payable Employee Inc. Tax Payable normal balance normal balance normal balance  542.00  985.40  227.42 normal balance 1,754.82  Lesson 14-4 page 348

JOURNALIZING PAYMENT OF LIABILITY FOR EMPLOYEE INCOME TAX, SOCIAL SECURITY TAX, AND MEDICARE TAX 1 3 5 4 2 1. Write the date. 2. Write the title of the three accounts debited. 3. Write the check number. 4. Write the three debit amounts. 5. Write the amount of the credit to Cash. Lesson 14-4, page 348

PAYING THE LIABILITY FOR FEDERAL UNEMPLOYMENT TAX Lesson 14-4, page 349

JOURNALIZING PAYMENT OF LIABILITY FOR FEDERAL UNEMPLOYMENT TAX January 31. Paid cash for federal unemployment tax liability for quarter ended December 31, $8.40. Check No. 343. Accounts Affected Unemployment Tax Payable—Federal Cash Classification Liability Asset Change Decreased Entered Debit side Credit side Unemployment Tax Payable—Federal Cash normal balance normal balance 8.40 8.40   Lesson 14-4, page 350

JOURNALIZING PAYMENT OF LIABILITY FOR FEDERAL UNEMPLOYMENT TAX 1 2 3 4 5 1. Write the date. 2. Write the title of the account debited. 3. Write the check number. 4. Write the debit amount. 5. Write the amount of the credit to Cash. Lesson 14-4, page 350

JOURNALIZING PAYMENT OF LIABILITY FOR STATE UNEMPLOYMENT TAX 1 2 3 4 5 1. Write the date. 2. Write the title of the account debited. 3. Write the check number. 4. Write the debit amount. 5. Write the amount of the credit to Cash. Lesson 14-4, page 350

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