Transcript Slide 1
Chapter 13 Vocab Test Review
Understanding how the brain processes, stores and retrieves information can also improve your study habits. For some people, cramming for a test can work in the short term, but by studying only once in a concentrated fashion, the learner has not signaled to the brain that the information is important. So while the initial study session of French vocabulary words starts the process of learning, it’s the next review session a few days later that forces the brain to retrieve the information — essentially flagging it as important and something to be remembered.
“When you are cramming for a test, you are holding that information in your head for a limited amount of time,” Mr. Carey says. “But you haven’t signaled to the brain in a strong way that’s it’s really valuable.” One way to signal to the brain that information is important is to talk about it. …or play “teacher” based on the information [you] have studied. Self-testing and writing down information on flashcards also reinforces learning.
Source: Better Ways to Learn, By Tara Parker-Pope
Lesson 13-1
Different Forms of Payroll Information
●
The total of gross earnings for all employees earning hourly wages, salaries, and commissions is called
salary expense
.
●
The debit to Salary Expense will be equal to the Total Gross Pay of all employees for the pay period.
LO1
© 2014 Cengage Learning. All Rights Reserved.
SLIDE 2
Analyzing Payment of Payroll
Lesson 13-1 In each pay period, the payroll information for each employee is recorded on his or her employee earnings record.
© 2014 Cengage Learning. All Rights Reserved.
SLIDE 3
Analyzing Payment of Payroll
Lesson 13-1 The payroll register
and
the employees earning record
contain all the information needed
to prepare a payroll as well as prepare the quarterly payroll tax reports.
© 2014 Cengage Learning. All Rights Reserved.
SLIDE 4
Analyzing Payment of Payroll
Lesson 13-1
LO1
Banking: An amount equal to net pay is deposited into a separate payroll checking account. The amount deposited covers everyone’s take home pay.
Salary Expense Dec. 15 8,076.75
= Salary Expense Debit is equal to total gross pay.
Employee Income Tax Payable Dec. 15 Social Security Tax Payable 494.00
Dec. 15 Medicare Tax Payable 500.77
Dec. 15 117.11
Health Insurance Premiums Payable Dec. 15 230.00
Retirement Contributions Payable Dec. 15 Cash 465.00
Dec. 15 6,269.87
© 2014 Cengage Learning. All Rights Reserved.
Dec. 15 6,269.87
SLIDE 5
Lesson 13-1
Journalizing Payment of a Payroll
LO2
December 15. Paid cash for semimonthly payroll, $6,269.87 (total payroll, $8,076.75, less deductions: employee income tax, $494.00; social security tax, $500.77; Medicare tax, $117.11; health insurance premiums, $230.00; retirement contributions, $465.00). Check No. 732.
Withheld taxes (deductions) are liabilities until paid to the government.
Total Earnings Accounts Credited Payroll Deductions © 2014 Cengage Learning. All Rights Reserved.
Amount Paid to Employees SLIDE 6
Lesson 13-2
Employer Payroll Taxes are Business Expenses
● ● ● Employer Social Security and Medicare taxes: Employer matches what the employee pays
(Same tax rate 6.2% and 1.45%)
Federal unemployment tax ● A federal tax paid by employers to administer the unemployment program is called
federal unemployment tax
, commonly referred to as
FUTA
. State unemployment tax ● A state tax paid by employers that is used to pay benefits to unemployed workers is called
state unemployment tax
, commonly referred to as
SUTA .
●
Understand: Unemployment taxes are only paid by the employer
SLIDE 7 © 2014 Cengage Learning. All Rights Reserved.
Calculating Unemployment Taxes
already met the 7,000 tax base and are not included in the FUTA Earnings.
1 Employee
Butler, John P.
Feng, Anthony R. Lendsey, Ann C. Prisock, Mary G. Swann, Justin A. Wells, Cary B. Enter prior accumulated earnings THREE Δ GREEN PRODUCTS, INC.
Calculation of FUTA Earnings for December 15, 20-- Pay Period
2 Prior Accumulated Earnings
$27,195.00
5,260.00 1,648.00
44,000.00 16,089.00 6,490.00
3 Earnings to Equal FUTA Tax Base
$ 0.00
1,740.00
5,352.00
0.00
0.00
510.00
4 Earnings for Current Pay Period
$1,466.25
1,494.00
240.00
2,000.00
1,432.50
1,444.00
1
Enter the difference between the FUTA tax base of 7,000 and prior accumulated earnings
2 3
Enter earnings for the current pay period
5 4 FUTA Earnings
$ 0.00
1,494.00
240.00
0.00
0.00
510.00
$2,244.00
Enter the FUTA earnings AKA: Unemployment taxable earnings © 2014 Cengage Learning. All Rights Reserved.
SLIDE 8
Lesson 13-2
Journalizing Employer Payroll Taxes
December 15. Recorded employer payroll taxes expense, $757.01, for the semimonthly pay period ended December 15. Taxes owed are: social security tax, $500.77; Medicare tax, $117.11; federal unemployment tax, $17.95; state unemployment tax, $121.18. Memorandum No. 44.
This is recorded in the general journal right after the employee’s payroll is recorded in the cash payments journal. It’s a new tax liability that must be recorded.
Dec. 15 Payroll Taxes Expense 757.01
LO3
Social Security Tax Payable Dec. 15 500.77
500.77
Medicare Tax Payable Dec. 15 117.11
117.11
Unemployment Tax Payable—Federal Dec. 15 17.95
Unemployment Tax Payable—State Dec. 15 121.18
SLIDE 9 © 2014 Cengage Learning. All Rights Reserved.
Journalizing Employer Payroll Taxes
Lesson 13-2
LO3
The employer payroll taxes become a new liability when the employees are paid.
Therefore they are journalized at the end of the pay period in the general journal
—even though they are actually paid to the government after the quarter ends.
© 2014 Cengage Learning. All Rights Reserved.
SLIDE 10
Lesson 13-3
Employer’s Quarterly Federal Tax Return
LO4 1
Heading
2
Number of Employees
3
Total Quarterly Earnings
4
Income Tax Withheld
5
Employee and Employer Social Security and Medicare Taxes
6
Total Employee and Employer Social Security and Medicare Taxes
7
Total Taxes SLIDE 11 © 2014 Cengage Learning. All Rights Reserved.
Lesson 13-3
Employer’s Quarterly Federal Tax Return
LO4
State Abbreviation
8
Monthly Schedule Depositor
9
Monthly Deposits
10
Total Deposits
11
Each employer is required by law to periodically report the payroll taxes withheld from employee salaries. Each employer must report this info quarterly.
© 2014 Cengage Learning. All Rights Reserved.
SLIDE 12
Employer Annual Reporting of Payroll Taxes— in addition to the quarterly reports
Lesson 13-3
LO4
© 2014 Cengage Learning. All Rights Reserved.
SLIDE 13
Lesson 13-3
Employer Annual Report to Employees of Taxes Withheld -- W-2 Form
The W-2 form reports an employee’s annual earnings and withholdings for federal income social security and Medicare taxes.
Employer must mail it before January
31 of the following year.
(0nly provided once a year.)
Remember, there is a tax base for Social Security
—but not for
Medicare. (In 2015, the SS tax base is $118,500. When I earn more than that, I don’t have to pay the 6.2% social security tax for the rest of the year. --Shock value is over—I do not earn that much money here at CHS. ) © 2014 Cengage Learning. All Rights Reserved.
SLIDE 14
Paying the Liability for Employee Income Tax, Social Security Tax, and Medicare Tax
Lesson 13-4
LO5
● Employers must pay to the federal, state, and local governments all payroll taxes withheld from employee earnings as well as the employer payroll taxes. ●
Understand: The payment of payroll taxes to the government is referred to as a deposit .
● The 12-month period that ends on June 30 of the prior year that is used to determine how frequently a business must deposit payroll taxes is called the
lookback period
.
Understand: The timing of the payroll tax payments to the government is based on the amount owed. The more they owe, the more frequently the government wants to be paid. Some (large) businesses SLIDE 15
Lesson 13-4 ●
Making Federal Tax
Deposits
LO5
New employers are monthly schedule depositors for the first calendar year of business. ● After a lookback period is established, the business must evaluate whether a change in its deposit period is required. (If the tax liability is not that large, the business can just deposit the payments quarterly.) ● Federal tax deposits must be paid using electronic fund transfers.
● Deposits can also be made using the Electronic Federal Tax Payment System (EFTPS).
● Tax rules change periodically.
SLIDE 16 © 2014 Cengage Learning. All Rights Reserved.
Lesson 13-4 Journalizing Payment of Liability for Employee Income Tax, Social Security Tax, and Medicare Tax January 15. Paid cash for liability for employee income tax, $998.00; social security tax, $2,023.06; and Medicare tax, $473.14; total, $3,494.20. Check No. 748.
This is recorded in the cash payments journal.
LO5
Employee Income Tax Payable Jan. 15 Bal 998.00
Dec. 15 Dec. 31 Jan. 15 Bal 494.00
504.00
998.00
Social Security Tax Payable Jan. 15 Bal 2,023.06
Dec. 15 Dec. 15 Dec. 31 Dec. 31 500.76
500.76
510.77
510.77
Jan. 15 Bal 2,023.06
It is considered a “deposit”. Jan. 15 Bal Medicare Tax Payable 473.14
Dec. 15 Dec. 15 Dec. 31 Dec. 31 Jan. 15 Bal 117.11
117.11
119.46
119.46
473.14
Cash Jan. 15 3,494.20
© 2014 Cengage Learning. All Rights Reserved.
SLIDE 17
Lesson 13-4 Journalizing Payment of Liability for Employee Income Tax, Social Security Tax, and Medicare Tax Check Number
LO5
Source document for paying off this tax liability to the government is a check.
© 2014 Cengage Learning. All Rights Reserved.
Check Amount SLIDE 18
Lesson 13-4
Paying the Liability for Federal Unemployment Tax
LO5
● ● ● FUTA (Federal Unemployment) taxes are paid by the end of the month following each quarter if the liability amount is more than $500.00.
FUTA tax is paid to the federal government using electronic funds transfer or the Electronic Federal Tax Payment System. The deposit for FUTA tax is similar to the deposit required for income tax, social security tax, and Medicare tax.
© 2014 Cengage Learning. All Rights Reserved.
SLIDE 19
Lesson 13-4
Journalizing Payment of Liability for Federal Unemployment Tax
January 31. Paid cash for federal unemployment (FUTA) tax liability for quarter ended December 31, $297.02. Check No. 749.
LO5
Unemployment Tax Payable—Federal Nov. 30 Bal Dec. 15 Dec. 31 290.84
3.89
2.29
Jan. 31 Bal 297.02
Dec. 31 Bal 297.02
Cash Jan. 31 297.02
1
Date
2
Account Debited
3
Check Number
4
Debit Amount © 2014 Cengage Learning. All Rights Reserved.
5
Check Amount SLIDE 20
Lesson 13-4
Journalizing Payment of Liability for State Unemployment Tax
This state tax is used to pay benefits to the state’s unemployed workers January 31. Paid cash for state unemployment (SUTA) tax liability for quarter ended December 31, $147.42. Check No. 750.
Unemployment Tax Payable—State Nov. 30 Bal Dec. 15 Dec. 31 105.74
26.24
15.44
Jan. 31 Bal 147.42
Dec. 31 Bal 147.42
Source document is a check. Cash Jan. 31 147.42
Understand: In general, employers are required to pay state unemployment taxes during the month following each calendar quarter.
© 2014 Cengage Learning. All Rights Reserved.
SLIDE 21
The End
© 2014 Cengage Learning. All Rights Reserved.