Chapter 8 QuickBooks Lecture Video

Welcome to the chapter 8 quickbooks lecture video. Payroll involves computing employee gross earnings, determining withholdings and deductions, and calculating net pay (or bring home pay). it also involves preparing employee paychecks, properly recording payroll-related transactions (journal entries), submitting payroll withholdings and deductions to the appropriate tax agency or other entity, and preparing payroll compliance reports.

Quickbooks allows you to process payroll and track payroll information. To process payroll in quickbooks, payroll must first be set up.

Payroll setup involves enabling the payroll feature, customizing and adding payroll accounts to the chart of accounts list, choosing a quickbooks payroll service or activating the manual entries feature, and establishing payroll items (the payroll item list).

Manual payroll systems are laborious and time-consuming. for each employee, the hours worked have to be tallied, the gross pay computed, withholdings and deductions determined, and net pay calculated.

Then, payroll checks are created along with pay stubs that show earnings, withholdings, and deductions for the current pay period as well as year to date. All this information has to be recorded in the payroll journal and posted to the general ledger accounts.

And, the year to date information has to be accumulated for government required quarterly (every 3 months) and year-end reports. prior to personal computers and accounting software packages such as quickbooks, companies used payroll preparation firms to complete payroll, process paychecks, and prepare the government compliance reports.

Companies are now able to process payroll in-house without the need for an outside payroll preparation firm. Quickbooks includes a payroll feature, that once activated, allows for processing payroll. gross pay is total earnings before withholdings and deductions.

The federal insurance contribution tax (fica) is comprised of social security and medicare. It is imposed on both employer and employee. Social security is 6.2% and is no longer paid once an employee makes $113,700 in a year, and medicare is 1.45% with no cap.

Federal income tax is based on filing status such as single, married, etc, and number of exemptions claimed. It is paid to the internal revenue services. State income tax is also based on filing status and exemptions and is paid to the state.

The federal unemployment tax act is used to fund unemployment insurance programs administered by the government. State unemployment insurance is required by all states to contribute to a state unemployment fund.

Rates vary by state. State disability insurance compensates employees if they are unable to work due to illness or injury (workmans comp). Company deductions include insurance, 4301k, profit-sharing plans, united way, etc. net pay is bring home pay after all deductions are taken out of ones check.

The united states treasury is the tax-collecting agency of the federal government. the chapter problem begins on p. 8-5. Open the company file ch8 kristin raina interior designs. Qbw. Make a backup copy of the file and name it ex8 kristin raina interior designs.

Restore the file with the same name. Change the company name. to activate the payroll feature in quickbooks, click edit on the main menu bar and click preferences.

In the left pane of the preferences window, click payroll & employees. Click the company preferences tab. Click the full payroll button. click ok. On p. 8-6, we update the chart of accounts list as we did in previous chapters.

Click lists on the main menu bar and click chart of accounts. Click 24000 payroll liabilities to select it. Click the account menu button and click edit account. change the number to 2100.

The account name is still payroll liabilities. Click save & close. click 66000 payroll expenses to select it. Click the account menu button and edit account. change the number to 6560.

The account name is the same. Click save & close. we need to add the accounts shown on pp. 8-6 and 8-7. To add the accounts, click the account menu button and click new.

In the add new account: choose account type dialog box, click the down arrow beside other account types and click other current liability. click continue. In the add new account dialog box, key 2110 in the number box.

The account name is social sec/medicare tax payable. Under the account name box, click the box beside subaccount of to put a check mark in in.

Click the down arrow and choose 2100 payroll liabilities. Click save & new. change the number to fit payable. It is also a subaccount of 2100 payroll liabilities. click save & new. Key 2120 in the number field.

The name is sit payable. It is also a subaccount of 2100 payroll liabilities. Click save & new. key 2125 in the number field. The name is futa payable. It is also a subaccount of 2100 payroll liabilities.

Click save & new. Key 2130 in the number field. The name is sui payable. It is also a subaccount of 2100 payroll liabilities. Click save & new. in the account type box, click the down arrow and click expense to change the account type. key 6565 in the number box.

The account name is salaries and wages expense. It is a subaccount of 6560 payroll expenses. Click save & new. Key 6610 in the number box.

The account name is social sec/medicare tax expense. It is a subaccount of 6560 payroll expenses. Click save & new. Key 6625 in the number box. The account name is futa expense. It is a subaccount of 6560 payroll expenses.

Click save & new. key 6630 in the number box. The account name is sui expense. It is a subaccount of 6560 payroll expenses. Click save & close. The updated chart of accounts list is shown on p.

8-7. Quickbooks offers several paid options to help companies with payroll. Payroll can also be processed manually. To setup quickbooks for manual processing, click help on the main menu bar and click quickbooks help. in the have a question? Window, in the search box, key payroll options and press enter or click the search icon.

Click payroll options in quickbooks. the payroll options page displays showing comparisons between the quickbooks payroll services. Close the options page with the x in the upper right corner. in the help article window, click the manually calculate and enter payroll withholdings for each paycheck link.

In the help article box, click the manual payroll calculations link. Click the set my company file to use manual calculations link. Close the have a question? And help article windows with the x in the upper right corner.

Click ok at the quickbooks information box. next we will edit the payroll item list. To review the payroll item list, click lists on the main menu bar and click payroll item list. to view a specific payroll item, double-click the item (federal withholding) or click the item to select it, click the payroll item menu button and click edit item to open the edit item window.

In the edit payroll item (federal withholding) box, click next. In the agency for employee-paid liability window, click next. In the taxable compensation page, click finish. choose the social security company payroll item by double-clicking.

Click next. at the enter name of agency to which liability is paid, click the down arrow and click united states treasury. In the liability account boxes, click the down arrow and click 2110 social sec/medicare tax payable.

Click next. At the enter the account for tracking this expense field, click 6610 social sec/medicare tax expense. Click next. click next. At the taxable compensation page, click finish. you are returned to the payroll item list with all changes saved. to complete the practice exercise on p.

8-15, double-click the medicare company item. Click next. In the enter name of agency box, choose united states treasury. In both the liability account boxes, choose 2110 social sec/medicare tax payable.

Click next. In the enter the account for tracking expenses box, choose 6610 social sec/medicare tax expense. Click next. in the company and employee tax rates box, click next. in the taxable compensation box, click finish.

Double-click the federal unemployment payroll item. Click next. In the enter name box, choose united states treasury. In the liability account box, choose 2125 futa payable. In the expense account box, choose 6625 futa expense. Click next.

In the rate box, choose 0.6% and click next. in the taxable compensation box, click finish. Edit the federal withholding item by double-clicking it. Click next.

In the agency window, choose united states treasury. In the liability account box, choose 2115 fit payable. Click next. at the taxable compensation box, click finish.

To add an item to the payroll item list, click the payroll item menu button and click new. Click custom setup and click next. click wage (hourly wages, annual salary, commission, bonus) and click next. click annual salary and click next.

Click regular pay and click next. in the name box, enter salary and click next. At the expense account window, choose 6565 salaries and wages. Click finish. Click the payroll item menu button and click new.

Click custom setup and click next. click state tax (state withholding, sdi, sui) and click next. at the enter the state box, choose mn. At the select the type of tax box, click state withholding.

Click next. The name is shown by default, accept it and click next. At the name of agency box, choose minn. Dept. of revenue.

Key 33-4777781 in the number that identifies you box, and choose 2120 as the liability account. Click next. Make sure salary is checked and click finish. at the schedule payments box, click ok.

Complete the practice exercises on p. 8-22. click the payroll item menu button and click new. Choose custom setup and click next. choose wage (hourly wages, annual salary, commission, bonus) and click next. at the wages box, choose hourly wages and click next. at the wages box, click regular pay and click next. in the enter name box, key hourly wages and click next. at the expense account box, choose 6565 salaries and wages expense account.

Click finish. click the payroll item menu button and click new. choose custom setup and click next. Choose sales tax (state withholding, sdi, sui) and click next. In the enter state box, choose mn.

In the type of tax, choose state unemployment and click next. in the enter name box, click next. In the enter name box, choose minn.

Dept. of revenue. In the number that identifies you, key er-12343. In the liability account box, choose 2130 sui payable. In the expense account box, choose 6630 sui expense. Click next.

Make sure that 3.4715% appears in each of the boxes and click next. Make sure there is a check mark by both salary and hourly wages and click finish. In the schedule payments box, click ok. to view the payroll item listing report for this chapter, click reports on the main menu bar, point to employees & payroll, and click payroll item listing. to print the report, click file, save as pdf.

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