chapter 14: payroll
DESCRIPTION
Chapter 14: Payroll. Payroll. Employees and employers are required to pay local, state, and federal payroll taxes. Employers must withhold taxes from each employee’s paycheck. The amount withheld for federal taxes is determined from tax tables published by the IRS. - PowerPoint PPT PresentationTRANSCRIPT
Chapter 14: Chapter 14: PayrollPayroll
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PayrollPayrollEmployees and employers are required to pay local, Employees and employers are required to pay local, state, and federal payroll taxes. Employers must state, and federal payroll taxes. Employers must withhold taxes from each employee’s paycheck. The withhold taxes from each employee’s paycheck. The amount withheld for federal taxes is determined from amount withheld for federal taxes is determined from tax tables published by the IRS.tax tables published by the IRS.The amount withheld depends on the employee’s The amount withheld depends on the employee’s earnings and the number of exemptions or earnings and the number of exemptions or withholding allowances claimed by the employee. withholding allowances claimed by the employee. FICA taxes and Medicare taxes are also deducted FICA taxes and Medicare taxes are also deducted from employee’s paychecks.from employee’s paychecks.It is the purpose of Chapter 14 to show you how to It is the purpose of Chapter 14 to show you how to use Peachtree to enter payroll default information, use Peachtree to enter payroll default information, add employees, make the correct journal entries for add employees, make the correct journal entries for payroll, and to print payroll reports.payroll, and to print payroll reports.
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Software Objectives, p. 495Software Objectives, p. 495
Explore the Payroll Setup Wizard.Explore the Payroll Setup Wizard.Enter initial payroll fields.Enter initial payroll fields.Enter employee and employer default Enter employee and employer default information.information.Journalize and post payroll journal entries.Journalize and post payroll journal entries.Print paychecks.Print paychecks.Print the financial statementsPrint the financial statementsMake four backups: two for Richard’s Sales & Make four backups: two for Richard’s Sales & Service; two for the end-of-chapter exercises.Service; two for the end-of-chapter exercises.
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Web Objectives, p. 507Web Objectives, p. 507Use your Internet browser to go to the book’s Use your Internet browser to go to the book’s website at website at www.mhhe.com/yacht2005www.mhhe.com/yacht2005
Go to the Internet Activity link on the book’s Go to the Internet Activity link on the book’s website. Then, select WEB EXERCISES PART website. Then, select WEB EXERCISES PART 3. Complete the fourth web exercise in Part 3-3. Complete the fourth web exercise in Part 3-Salary Calculator.Salary Calculator.
Use a word processing program to write Use a word processing program to write summaries of the websites that you visitedsummaries of the websites that you visited
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Peachtree TipsPeachtree Tips
The exercises in Part 3 are cumulative. Chapters 11, 12 The exercises in Part 3 are cumulative. Chapters 11, 12 and 13 must be completed before starting Chapter 14. and 13 must be completed before starting Chapter 14.
The Payroll Entry window is the Payroll Journal.The Payroll Entry window is the Payroll Journal. The payroll tax withholdings calculated automatically The payroll tax withholdings calculated automatically
when students select the Payroll Entry task are for when students select the Payroll Entry task are for example purposes only. They do not reflect exact example purposes only. They do not reflect exact withholding amounts. For an additional fee, Peachtree withholding amounts. For an additional fee, Peachtree Software has a payroll tax update service. Software has a payroll tax update service.
To learn more about Peachtree Software’s payroll tax To learn more about Peachtree Software’s payroll tax service, visit their website at service, visit their website at www.peachtree.com/taxtablewww.peachtree.com/taxtable..
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Peachtree Tips (concluded)Peachtree Tips (concluded)
Follow these steps to check the global tax table version:Follow these steps to check the global tax table version:
1.1. Start Peachtree. Open any company.Start Peachtree. Open any company.2.2. From the menu bar, click on Help; About Peachtree Accounting. The Installed Tax From the menu bar, click on Help; About Peachtree Accounting. The Installed Tax
Service shows 19000101.Service shows 19000101.
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Backing Up Chapter 14Backing Up Chapter 14
Backup Name Backup Name
KBKB Page Nos.Page Nos.
A:\Chapter 14 BeginA:\Chapter 14 Begin 273 KB273 KB 512-513512-513
A:\Chapter 14A:\Chapter 14 292 KB292 KB 526526
A:\Exercise 14-1A:\Exercise 14-1 256 KB256 KB 532532
A:\Exercise 14-2A:\Exercise 14-2 276 KB276 KB 533533
.
This information is also shown on page 362.
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Chapter 14 TopicsChapter 14 Topics1.1. Software & web objectives, p. 495Software & web objectives, p. 4952.2. Getting started, pp. 498-499Getting started, pp. 498-499
a. Checking your global tax table version, pp. 500-501a. Checking your global tax table version, pp. 500-501b.b. Establishing the payroll account, p. 501Establishing the payroll account, p. 501
3.3. Initial payroll fields, pp. 501-505Initial payroll fields, pp. 501-5054.4. Entering Employee and Employer Default Information, pp. Entering Employee and Employer Default Information, pp.
505-510505-5105.5. Entering employee maintenance information, Entering employee maintenance information,
pp. 510-512pp. 510-5126.6. Backing up your data, pp. 512-513Backing up your data, pp. 512-5137.7. Payroll entry, pp. 513-519Payroll entry, pp. 513-5198.8. Printing the payroll journal, pp. 519-521Printing the payroll journal, pp. 519-5219.9. Printing the general ledger trial balance, pp. 521-522Printing the general ledger trial balance, pp. 521-522
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Chapter 14 Topics (concluded)Chapter 14 Topics (concluded)
10.10. Printing the financial statements, pp. 523-525Printing the financial statements, pp. 523-525
11.11. Backing up Chapter 14 data, p. 526Backing up Chapter 14 data, p. 526
12.12. Internet activity, p. 527Internet activity, p. 527
13.13. Summary and review, p. 527Summary and review, p. 527
a. Going to the net, p. 527a. Going to the net, p. 527
b. Multiple-choice questions, pp. 528-530b. Multiple-choice questions, pp. 528-530
c. Exercise 14-1, pp. 530-533c. Exercise 14-1, pp. 530-533
d. Exercise 14-2, p. 533d. Exercise 14-2, p. 533
e. Chapter 14 index, p. 534e. Chapter 14 index, p. 534
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Getting started, pp. 498-499Getting started, pp. 498-499
Complete steps 1 – 2g. on pages 498-499.Complete steps 1 – 2g. on pages 498-499.
Remember, you must complete Chapters 11, 12, and 13 Remember, you must complete Chapters 11, 12, and 13 before starting Chapter 14.before starting Chapter 14.
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Checking Your Global Tax Table Version, p. 500Checking Your Global Tax Table Version, p. 500
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Establishing the payroll account, p. 501Establishing the payroll account, p. 501
In order to establish the payroll checking account, In order to establish the payroll checking account, transfer funds from Santa Barbara Bank (Account No. transfer funds from Santa Barbara Bank (Account No. 10200) to the Payroll Checking Account (Account No. 10200) to the Payroll Checking Account (Account No. 10300). Read the transaction information on p. 501.10300). Read the transaction information on p. 501.
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Payroll Setup Wizard, p. 501-502Payroll Setup Wizard, p. 501-502Click on Maintain; Default Information, Payroll Setup Click on Maintain; Default Information, Payroll Setup Wizard. This window is shown on p. 502.Wizard. This window is shown on p. 502.
Click on <Next>. Read step 2, p. 502. Click <Next>.Click on <Next>. Read step 2, p. 502. Click <Next>.
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Payroll Setup Wizard, continued, p. 503Payroll Setup Wizard, continued, p. 503
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Payroll Setup Wizard, continued, p. 504Payroll Setup Wizard, continued, p. 504
Click <Next>. The Default Payroll G/L Accounts window Click <Next>. The Default Payroll G/L Accounts window appears.appears.
You will make changes to these defaults on page 508 You will make changes to these defaults on page 508 and 509. Complete steps 7-12 on pages 504 and 505.and 509. Complete steps 7-12 on pages 504 and 505.
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Entering employee and employer Entering employee and employer default information, pp. 505-506default information, pp. 505-506
Read the information on p. 505.Read the information on p. 505.Click on Maintain; Default Information, Employees. Complete steps Click on Maintain; Default Information, Employees. Complete steps 1 and 2 on p. 505. This window is shown on p. 506.1 and 2 on p. 505. This window is shown on p. 506.
Click on <OK>.Click on <OK>.
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Assign Payroll Fields for EmployEE Assign Payroll Fields for EmployEE Paid Taxes, p. 506Paid Taxes, p. 506
Click on the arrow next to EmployEE Paid Click on the arrow next to EmployEE Paid Taxes. This window is shown on p. 506.Taxes. This window is shown on p. 506.
Click on <OK>.Click on <OK>.
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Assign Payroll Fields for EmployER Paid Assign Payroll Fields for EmployER Paid Taxes, p. 507Taxes, p. 507
Click on the arrow next to EmployER Paid Taxes. Click on the arrow next to EmployER Paid Taxes. Click on the down-arrow in the State Disability (SDI) Click on the down-arrow in the State Disability (SDI) field. field.
Click on <Click on <OOk> to return to the Employee Defaults k> to return to the Employee Defaults window. Then, select the Pay window. Then, select the Pay LLevels tab.evels tab.
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Employee Defaults, p. 507Employee Defaults, p. 507Make sure you have selected the Pay Make sure you have selected the Pay LLevels tab on the evels tab on the Employee Defaults window. Then for Overtime, select Employee Defaults window. Then for Overtime, select Account No. 77600, Overtime Expense. This window is Account No. 77600, Overtime Expense. This window is shown on p. 507.shown on p. 507.
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Employee Defaults (continued) p. 508Employee Defaults (continued) p. 508Complete steps 10–17 on p. 508. This Complete steps 10–17 on p. 508. This window is shown below step 17, p. 508.window is shown below step 17, p. 508.
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EmployEEmployERR Fields tab, pp. 509-510 Fields tab, pp. 509-510
Complete step 18 on p. 509. This window is shown Complete step 18 on p. 509. This window is shown below step 18 on p. 509.below step 18 on p. 509.
On p. 510, complete step 19 by clicking on <OK> to On p. 510, complete step 19 by clicking on <OK> to save your changes and return to the menu bar.save your changes and return to the menu bar.
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Entering employee maintenance Entering employee maintenance information, pp. 510-512information, pp. 510-512
Click on Maintain; Employees/Sales Reps. Complete steps 1 Click on Maintain; Employees/Sales Reps. Complete steps 1 and 2 on p. 510. and 2 on p. 510.
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Maintain Employees/Sales Reps, p. 511Maintain Employees/Sales Reps, p. 511
Click on the Withholding Click on the Withholding IInfo tab. Complete the nfo tab. Complete the information shown on p. 510. information shown on p. 510.
Complete steps 4 – 6 on pp. 511.Complete steps 4 – 6 on pp. 511.
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Maintain Employees/Sales Reps, p. 512 Maintain Employees/Sales Reps, p. 512
After completing step 6 on page 511, this window After completing step 6 on page 511, this window shows Pay Ishows Pay Innfo. fo.
Complete steps 7 – 12 on p. 512.Complete steps 7 – 12 on p. 512.
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Backing up your data, p. 512-513Backing up your data, p. 512-513
Complete steps 1 – 6 on pp. 512-513 to Complete steps 1 – 6 on pp. 512-513 to back up your data.back up your data.
Use Use Chapter 14 BeginChapter 14 Begin as the back up as the back up name.name.
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Payroll Entry, pp. 513-515Payroll Entry, pp. 513-515
Read the information on pages 513-515Read the information on pages 513-515Complete steps 1 – 9 on pages 514-515 to issue a payroll check. The Complete steps 1 – 9 on pages 514-515 to issue a payroll check. The Payroll Entry window is shown on p. 515.Payroll Entry window is shown on p. 515.
Click on the Print icon.Click on the Print icon.
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Print Forms: Payroll Checks, pp. 516-517Print Forms: Payroll Checks, pp. 516-517
Complete step 11 on p. 516. Highlight OCR - PR Preprint 1 Stub. Complete step 11 on p. 516. Highlight OCR - PR Preprint 1 Stub. Read the comment on page 516. The Preview Forms: Payroll Read the comment on page 516. The Preview Forms: Payroll Checks window is shown on p. 516.Checks window is shown on p. 516.
Click <OK>. Click <OK>.
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First Check Number, pp. 517-519First Check Number, pp. 517-519Type Type 101101 as the First Check Number. This window is shown as the First Check Number. This window is shown on p. 517 under step 14.on p. 517 under step 14.
Click on <Print>. Compare your check with the one shown on Click on <Print>. Compare your check with the one shown on page 517. Complete steps 16 and 17 on p. 518. Compare page 517. Complete steps 16 and 17 on p. 518. Compare your check with the one shown on p. 518. Then, issue the your check with the one shown on p. 518. Then, issue the checks shown in step 18.checks shown in step 18.
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Printing the payroll journal, p. 519-521Printing the payroll journal, p. 519-521
Complete steps 1 and 2 on p. 519.Complete steps 1 and 2 on p. 519.
Compare your payroll journal to the one Compare your payroll journal to the one shown on pp. 519-521.shown on pp. 519-521.
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Printing the general ledger trial Printing the general ledger trial balance, p. 521-522balance, p. 521-522
Complete steps 1 and 2 on p. 521.Complete steps 1 and 2 on p. 521.
Compare your general ledger trial balance Compare your general ledger trial balance to the one shown on p. 522.to the one shown on p. 522.
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Printing the financial statements, Printing the financial statements, pp. 523-525pp. 523-525
Complete steps 1-3 on pp. 523-525.Complete steps 1-3 on pp. 523-525.
Compare your financial statements with Compare your financial statements with the ones shown on pages 523, 524, and the ones shown on pages 523, 524, and 525.525.
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Backing Up Chapter 14 Data, p. 526Backing Up Chapter 14 Data, p. 526
Complete steps 1-6 on page 526.Complete steps 1-6 on page 526.The back up name is The back up name is Chapter 14Chapter 14..
Click on <Click on <OOk>. Compare your check to the one shown on p. 381. Record the additional payments k>. Compare your check to the one shown on p. 381. Record the additional payments shown on p. 382. shown on p. 382.
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Glossary of TermsGlossary of TermsChapter 14Chapter 14
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Exemptions, p. 495Exemptions, p. 495
These are withholding allowances These are withholding allowances claimed by the employee. The number of claimed by the employee. The number of exemptions or withholding allowances exemptions or withholding allowances usually includes one for the employee, usually includes one for the employee, one for the employee’s spouse, and one one for the employee’s spouse, and one for each dependent.for each dependent.
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Withholding allowances, p. 495Withholding allowances, p. 495
Exemptions claimed by the employee. Exemptions claimed by the employee. The number of exemptions or The number of exemptions or withholding allowances usually includes withholding allowances usually includes one for the employee, one for the one for the employee, one for the employee’s spouse, and one for each employee’s spouse, and one for each dependent.dependent.
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FICA taxes, p. 496FICA taxes, p. 496
This deduction from wages is also called This deduction from wages is also called the social security tax and provides the social security tax and provides qualified workers who retire at age 62 or qualified workers who retire at age 62 or older with monthly payments from the older with monthly payments from the federal government. A portion of this tax is federal government. A portion of this tax is for Medicare.for Medicare.
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Medicare, p. 496Medicare, p. 496
A portion of FICA taxes (also called social A portion of FICA taxes (also called social security taxes) deducted from wages of security taxes) deducted from wages of qualified workers. Medical benefits called qualified workers. Medical benefits called Medicare are received by retirees after Medicare are received by retirees after reaching age 65.reaching age 65.
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W-2 forms, p. 496W-2 forms, p. 496
An annual report of an employee’s wages An annual report of an employee’s wages subject to FICA and federal income tax subject to FICA and federal income tax that shows the amounts of these taxes that shows the amounts of these taxes that were withheld.that were withheld.
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Internet Activity, p. 526Internet Activity, p. 52611 Go to the book’s website at Go to the book’s website at www.mhhe.com/yacht2005www.mhhe.com/yacht2005
22 In the Student Center list, link to Internet Activities.In the Student Center list, link to Internet Activities.
33 Link to WEB EXERCISES PART 3.Link to WEB EXERCISES PART 3.
44 Complete the SALARY CALCULATOR- Chapter 14 Complete the SALARY CALCULATOR- Chapter 14 exercise. Read steps 1-3.exercise. Read steps 1-3.
55 Follow the steps shown on the book’s website to complete Follow the steps shown on the book’s website to complete this Internet activity.this Internet activity.
66 Using a word processing program, write a brief summary Using a word processing program, write a brief summary of what you find. Include all appropriate website of what you find. Include all appropriate website addresses.addresses.
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Going to the Net, p. 527Going to the Net, p. 527 Access the Employer Reporting and Instructions Access the Employer Reporting and Instructions
website at website at www.ssa.govwww.ssa.gov/employer//employer/. Link to General . Link to General W-2 Filing Information, then answer these questions.W-2 Filing Information, then answer these questions.
1.1. What are dates that employers must send W-2 What are dates that employers must send W-2 information to the Social Security Administration? information to the Social Security Administration? (Include the dates for (Include the dates for bothboth electronic and paper electronic and paper filing.)filing.)
2.2. When must employers give employees their W-2?When must employers give employees their W-2?3.3. What two forms do employers send to the Social What two forms do employers send to the Social
Security Administration?Security Administration?