Three-Month Project  NOTE! Templates needed to complete these exercises, including one containing year-to-date payroll data, are included in the Student Exercise Files download for this course

Three-Month Project 
NOTE! Templates needed to complete these exercises, including one containing year-to-date payroll data, are included in the Student Exercise Files download for this course. 
Ampersand, Inc., is a small business that operates in Somerset, VT. The company is located at 732 Appalachian Way, Somerset, VT 05363. Its federal Employer Identification Number is 44-4444444, and its president, who signs all tax forms, is Stacey Jones (telephone #802-555-3917). The company does not wish to name a third-party designee on forms. 
During 2021 four individuals are employed by Ampersand, Inc. These employees are as follows: 
Name Address Social Security # Federal W/H State W/H Marital Allowances Allowances Status Maggie Hough 13 spruce street somerset, VT 05363 222-22-2222 single William Finnegan 7 smith Boulevard somerset, VT 05363 999-99-9999 Married Stacey 8110 Browning Place 555-55-5555 Single Jones Somerset, VT 05363 Francine stewart 101 Park court somerset, VT 05363 888-88-8888 N/A N/A Married 

Three-North 251 Stacey Jones Gross Federal State Social Medicare 401(k) Charitable Quarter Earnings Income Tax Income Tax Security Tax Tax Deduction Cont. 1st quarter $65,500.11 $15,460.25 $3,274.96 $4,061.07 $949.78 $0 $195 2nd quarter $65,500.11 $15,460.25 $3,274.96 $4,061.07 $949.78 $0 $195 3rd quarter $65,500.11 $15,460.25 $3,274.96 $731.46 $949.78 $0 $195 Francine Stewart Gross Federal State Social Medicare 401(k) Charitable Quarter Earnings Income Tax Income Tax Security Tax Tax Deduction Cont. 1st quarter SO SO 2nd quarter SO SO 3rd quarter 51,807.70 I $147 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $88.58 $112.08 $26.21 $36.15 $0 
Note that all tax payments and filings are made on the due date. Based on the data provided here, you will complete the following: 
1. Establish an employee earnings record for each of the company's four employees. Complete the top portion of each record. 
2. Establish and complete the payroll register for each weekly pay period in the fourth quarter. When calculating federal income tax withholding, use the withholding tables where possible, and refer to the percentage method only when necessary. For simplicity, calculate the state income tax withholding as 5% of each employee's taxable pay (which is the same as taxable pay for FWT). Recall that state income tax withholding would ordinarily be calculated using the applicable state's withholding tables. Payroll checks are remitted to the employees in the same order (Hough, Finnegan, Jones, Stewart) each pay period and are written from a bank account that is used solely for these payments. The first payroll check written in October is check #4711. 
Note that all charitable contributions are deemed to be made on the final day of each pay period. The following information will be required for the completion of these records for the two employees who are compensated via an hourly wage: 
250 Payroll Accounting Chapter 7: comprehensive Projects—Paper-Based versions 
Note that Francine Stewart was hired in September, and her first day of work was Monday, September 20. On her W-4 Form Francine left sections 2 through 4 blank. Francine files as married filing jointly on her tax return. Additionally, due to an economic downturn, Maggie Hough was laid off in late November, with her last day of work on Friday, November 19. 
All employees of Ampersand, Inc., work a regular 40-hour workweek (thus all hours worked over 40 in a given week are overtime hours), receive overtime pay at a rate of 1.5 times the regular wage rate, and are paid weekly on Sunday for the most recent week (which runs from Monday through Sunday, although employees never work on weekends). The SUTA tax rate applicable to Ampersand, Inc., is 2.5%, while the SUTA wage base in Vermont is $14,100. 
Earnings and voluntary deduction information for each of the four employees is as follows: 
Regular Annual Weekly 401(k) Weekly Charitable Name Wage Rate Salary Deduction Contribution Maggie Hough $14/hour N/A 5% of gross pay $10 William Finnegan $18/hour N/A 4% of gross pay $5 Stacey Jones N/A $262,000.44 N/A $15 Francine Stewart N/A S94,000.40 2% of gross pay N/A 
The first three quarters of the year have passed, and all payroll-related activity has been properly accounted for as of 9/30/2021. Quarterly payroll data for each of the four employees is as follows: 
Maggie Hough 
Gross Quarter Earnings Federal Income Tax $533 S533 State Income Tax $345.80 $345.80 Social Security Tax $451.36 $451.36 Medicare TaX 5105.56 5105.56 S105.56 401(k) Deduction $364 S364 S364 Charitable Cont. 5130 5130 S130 1st quarter 57,280 2nd quarter 57,280 3rd quarter S7,280 S533 $345.80 5451.36 William Finnegan Gross Quarter Earnings Federal Income Tax State Income Tax Social Security Tax Medicare Tax 401(k) Deduction Charitable Cont. 1st quarter 59,360 2nd quarter 59,360 $377 $377 $449.28 $449.28 $580.32 $580.32 $135.72 $135.72 $374.40 $374.40 $65 $65 3rd quarter 59,360 $377 $449.28 $580.32 $135.72 $374.40 $65 
252 Payroll Accounting Chapter 7: Comprehensive Projects—Paper-Based Versions 
Weekly Hours Worked 
Weekly Start Date E,0' • -5 co 0 4 William Finnegan September 27 44 October 4 42 37 October 11 38 40 October 18 40 46.5 October 25 43.5 42 November 1 40 45 November 8 39 40 
WARNING! 
Weekly Start Date Maggie Hough William Finnegan November 15 41 34.5 November 22 0 40 November 29 0 41 December 6 0 43.5 December 13 0 42.5 December 20 0 40 
The above dates are weekly start dates. Refer to a calendar to determine the weekly end dates and associated pay dates. Keep in mind that tax liability and payment amounts are determined based on the weekly pay dates. 
3. Complete an employee earnings record for the 4th quarter for each of the four employees. Divide the voluntary deductions from the payroll register appropriately across the associated columns within the employee earnings records. If directed to do so by your instructor, record the necessary journal entries for each pay period. 4. Complete Form 941 for both the 3rd and 4th quarters. Assume that the employees earned the same amount during each pay period of the 3rd quarter and that there were four, five, and four pay periods during the months of July, August, and September, respectively. Note that based on the lookback period, the company is a monthly depositor. Assume that all necessary deposits were made on a timely basis and that the employer made deposits equal to the total amount owed for each quarter. Although Vermont quarterly state payroll forms are also filed by Ampersand, Inc., you will not complete these. If directed to do so by your instructor, record the necessary journal entries associated with each Form 941 (including those required for any tax payments made). NOTE! Recall from the Form 941 Rounding Considerations section that quarter- and year-end tax figures should not be calculated based on the total taxable earnings for the respective quarter or year. Instead, to avoid rounding discrepancies, tax figures within Part 2 of Form 941 should be determined for each employee by adding the individual taxes across each pay period. 
5. Complete Form 940 for Ampersand, Inc. Note that FUTA payments are made only when required (i.e., if the employer is permitted to postpone the payment of these taxes, it will do so until a point in time when payment must be remitted). If directed to do so by your instructor, record the necessary journal entry associated with Form 940. 
6. Calculate total SUTA tax owed by the employer. Although Ampersand, Inc., will file state forms in which this figure is reported, you are required to calculate only the total amount owed for the year. 7. Complete Copy A of Form W-2 for each of the four employees. State wages were the same as federal wages subject to federal withholding tax for each of the four employees, and the state identification number for Ampersand, Inc., is the same as its federal Employer Identification Number. 8. Complete Form W-3 for Ampersand, Inc. Note that the company files the paper version of the form and selects "None apply" in the Kind of Employer section.