A payroll register is prepared for each pay period. The payroll registerA record of payroll information for each employee for the pay period shows all the payroll information for the pay period.

FIGURE 10.3   Payroll Register

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THE PAYROLL REGISTER

4  6.  OBJECTIVE Enter gross earnings,deductions, and net payin the payroll register.

FIGURE 10.3 shows the payroll register for Kent Furniture and Novelty Company for the week ended January 7. Note that all employees were paid for eight hours on January 1, a holiday. To learn how to complete the payroll register, refer to Figure 10.3 and follow these steps.

1. Columns A, B, and E. Enter the employee’s name (Column A), number of withholding allowances and marital status (Column B), and rate of pay (Column E). In a computerized payroll system, this information is entered once and is automatically retrieved each time payroll is prepared.
2. Column C. The Cumulative Earnings column (Column C) shows the total earnings for the calendar year before the current pay period. This figure is needed to determine whether the employee has exceeded the earnings limit for the FICA and FUTA taxes. Since this is the first payroll period of the year, there are no cumulative earnings prior to the current pay period.
3. Column D. In Column D enter the total number of hours worked in the current period. This data comes from the weekly time sheet.
4. Columns F, G, and H. Using the hours worked and the pay rate, calculate regular pay (Column F), the overtime earnings (Column G), and gross pay (Column H).
5. Column I. Calculate the cumulative earnings after this pay period (Column I) by adding the beginning cumulative earnings (Column C) and the current period’s gross pay (Column H).
6. Columns J, K, and L. The Taxable Wages columns show the earnings subject to taxes for social security (Column J), Medicare (Column K), and FUTA (Column L). Only the earnings at or under the earnings limit are included in these columns.
7. Columns M, N, O, and P. The Deductions columns show the withholding for social security tax (Column M), Medicare tax (Column N), federal income tax (Column O), and medical insurance (Column P).
8. Column Q. Subtract the deductions (Columns M, N, O, and P) from the gross earnings (Column H). Enter the results in the Net Amount column (Column Q). This is the amount paid to each employee.
9. Column R. Enter the check number in Column R.
10. Columns S and T. The payroll register’s last two columns classify employee earnings as office salaries (Column S) or shipping wages (Column T).

When the payroll data for all employees has been entered in the payroll register, total the columns. Check the balances of the following columns:

• Total regular earnings plus total overtime earnings must equal the gross amount (Columns F + G = Column H).

• The total gross amount less total deductions must equal the total net amount.

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• The office salaries and the shipping wages must equal gross earnings (Columns S + T = Column H).

The payroll register supplies all the information to make the journal entry to record the payroll. Journalizing the payroll is discussed in Section 3.

Problem  10.1A, 10.4A, 10.4B