Case Teaching Package
A case teaching package is available for this case. It includes strategies for case presentation, key concepts, solutions to the assignment questions in the case, and suggestions for the most effective ways to work this case into your course.

Length
This case is 6 pages in length and its case teaching package is 14 pages.

Abstract

This case deals with calculating payroll, withholdings, and related benefits. The result of the calculations will be journal entries pertaining to payroll and necessary period-end accruals and the reversal of prior period accruals.

As a newly hired payroll accountant for Kemgen Corporation, the student is asked to calculate period end accruals pertaining to payroll and the related withholdings and benefits for the related period. In doing so, the student is provided with general information relative to Human Resources Policies & Procedures, Benefits Information, tax rates for employees and employer, pay periods and pay dates. Additionally, the student is provided with a listing of employees and their related salaries, hourly rates, hours worked, dependents, benefits, and vacation status. Utilizing all of this information, the student will calculate the gross payroll, related withholdings, and net payroll for the specified periods. Additionally, based on Human Resources Policy and employee data, the student is asked to calculate a vacation accrual as of the end of the period. From the information calculated, the student is asked to prepare the related journal entries and post them to the trial balance as of the end of the period.

From the information calculated above, the student will be asked to critically evaluate their work. In reviewing the final balances of the payroll and related accounts on the trial balance, the student is asked to prepare a proof supporting the reasonableness of their work and the account balances on the trial balance. Consequently, the student will step back from their work and utilize a skillset that serves to gain a more thorough understanding of their work and whether or not it makes sense relative to the larger picture.

This case is designed to be utilized in an Intermediate Accounting or Principles of Accounting Course. This case will draw together the students computational skills, analytical skills, and understanding of the recording of accrued expenses relative to payroll. Students will also draw upon logic in determining the reasonableness of the work they have completed.

Study Questions

1. Prepare a worksheet showing the number of days and dollar amounts of accrued vacation for each employee as of December 31, 1999.
2. Prepare a worksheet calculating gross Salaries, Wages, & Overtime for both the December 18 and January 1 reporting periods.
3. Prepare a worksheet calculating withholdings and net pay for both the January 1 and January 15 payroll.
4. Prepare necessary journal entries to record the January 1 and January 15 payroll and Accrued Vacation and Accrued Personal Days as of December 31, 1999.
5. Prepare a proof to ensure the relative accuracy of the payroll and related account balances as of December 31, 1999.

The downloadable file for this case is in Microsoft® Word 7.0 for Windows®.

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