 in this presentation we're going to enter the data from the payroll register for the last month of operations of december for the year and enter that information into the general journal to the general ledger and create the trial balance from it support accounting instruction by clicking the link below giving you a free month membership to all of the content on our website broken out by category further broken out by course each course then organized in a logical reasonable fashion making it much more easy to find what you need than can be done on a u2 page we also include added resources such as excel practice problems pdf files and more like quickbooks backup files when applicable so once again click the link below for a free month membership to our website and all the content on it so there's going to be a bit of a twist on this last one it's going to be much the same however a little bit different we're going to try to put this in a little bit faster focus a little bit more on excel as we format this last one we're going to start here on the register and note we're going to be on the data aim for november we've got the frozen pains and we've made it in green here so that we don't mistake where we're at in order to freeze the pains if your pains not frozen yet we're going to go up top to sell all the way up to a four a four then you're going to go to the view tab you're going to go to the windows group we're going to go to the freeze pains we're going to go to freeze it'll say freeze pains if your for pains aren't yet frozen whereas mine says unfreeze because my pains are already frozen so i'm not going to click once it's frozen however we should be able to see these top bar will remain as we scroll down to the current pay period we are working on that of the final month december okay so once we're there i'm going to make this green you can highlight the all your numbers there and right click and make them green if you choose to do so it probably doesn't matter because we're not going to move around too much once we're here then we're going to go to the general ledger and see if we can get our data situated there so that we can put this last few journal entries in and be good with the year it's a busy time here year in for us as we enter this last payroll period in december so we're going to select all the cells i'm going to unhide everything first and then see if we can situate things and then we'll hide everything once again when we're ready so we're going to put our cursor on the cell the drop down like this left click and highlight all the way to the left and then select the selected or right click on the selected area and then unhide that selected area then we're going to see all of our data here now we're going to go to of course our note i'm having problems here because there's also frozen pains here so the frozen pains can cause pain when you don't know they're frozen so you want to unfreeze the pains and then we'll freeze them again to to help us so we're going to go to the home to the view tab up top we're going to go to the windows group we're going to go to the freeze pains and go to unfreeze the pain and then we can move and then we'll freeze the pains once we no longer need as much movement so we want to put our information into this last data cell of course our journal entry is going to be much the same so as we did last time we're going to copy not the numbers but the format of the cells so we're going to say you know we're going to need this we're going to need this i'm not going to copy the last one let's copy the last one we'll copy the last one too so we're going to copy all that we're going to right click and copy and then we're going to put our cursor over here and right click and paste 123 123 helps this time the formulas only that means because we changed the the format type down here a bit and that's because there's going to be a slight difference in this final pay period meaning we've been running payrolls for the month and then paying the payroll the first day of the following month that's when we actually wrote the check that's when we're making the payroll if that's our system if that's the payroll system we're doing which means we're kind of more on a cash basis which is typical for payroll payroll will not line up specifically to our pay periods when we make financial statements it may not work exactly this way but we'll have some you know it depends on what system we're in but in any case we want to set up the payroll system to work as easily as possible for the payroll system not so that it works as easily as possible for an accrual accounting system and in our case that meant that we wrote the checks on the first day of the following pay period and we just did one journal entry at that point of time in order to process payroll now we're gonna have basically an adjusting entry at the end of the year because we need to have all the payroll in there as of 1231 and we're not going to pay it until January of the next year so what we're going to do is is we're not actually going to pay cash so the journal entry will be all the same except this account we're not going to pay it yet because we typically don't pay it until the the first day of the next year and we're going to keep with that practice and note that we don't want to mess up the payroll the payroll kind of usually is like its own function so we don't want to you know tweak the payroll process and make it more complicated in order to align with the end of the year what we're going to do is make an adjusting entry and then allow payroll to do what payroll does so to do that we're going instead of just paying the cash out here we're going to put it into a payroll liability account so that's going to be our twist right there that's the twist that we were looking forward to seeing so the liability is going to be the thing that increases and not the cash account I'm going to right click and paste that there everything else will be the same and this will increase now note if you're looking at payroll problems in a book then oftentimes they like to use the payroll payable account because it kind of tells you exactly you know what we're doing that this is a payroll journal entry so you'll you might see that on all all the journal entries and it just again it depends kind of how we're setting up the payroll process then and then we've got the payroll tax liability this one will be the same and note that the payment that we make when we actually make the payment then it's going to happen in January of the next year right this the the actual payment happened on January 15th even though the payment was for payroll period ended in the prior year for December and that's typically the case so when we do the payroll taxes and try to tie everything out we have to deal with that the fact that the payments are not going to be in the same time period typically as the payroll period for which they're being paid and that'll happen at the cutoffs that'll happen in December and and possibly in the first in January if we were doing a full payroll period we'd have to watch out for that kind of issue so we'll look at that when we do the when we do the summary documents so now i'm going to hide which will be the 941s and the 940 for the end of the year so let's hide everything to the left now i'm going to put my cursor on this x here and then we're going to select the data all the way to the left let go and then right click on that data and hide that data we don't need to see that data too much data be looking at it the same time so now we're just going to pick up our information here from the payroll register so we've got our our journal entry we're going to go back to the payroll register what we want to pick up uh well let's go let's look at it let's take a look at it we're going to go down to our last month here and we're going to start with total earnings we're going to pick up just just the same thing here we got total earnings minus all these deductions gives us the net pay so we'll start with total earnings let's go back to our journal entry that'll be an expense it'll be a debit we're in ab 5 we're going to put equals there and then select go back to our register and say we want this dark blue number the 48 7750 for total earnings then all of these are going to be credits because they're liabilities this is what we're going to be removing from the paycheck for the benefit of the employee and paying it to the government so in ac 60 we're going to say negative instead of equals go back to the register and we're looking for that oh asti which is right here in n 37 and enter we'll do the same for hi we're going to say instead of equals negative go back to the register and we're looking for hi n 037 and enter we're going to do the same for fit federal income tax negative instead of equal go back to the register and point to that federal income tax and enter group insurance we're going to do the same thing negative instead of equals go back to the register. Group insurance is nice to benefit. This is the optional benefit, remember, and enter. The union dues, we're going to say negative. Go back to the register, pick up that 16 and enter. The 401K or retirement plan, also a nice option to benefit to have. So it's good that they offer that. This is actually is a benefit to take out of a paycheck. And there's the $2,774.20. Now, instead of the difference being cash, the net pay, if I go back to the register, we see that the net pay should be the difference. That's what we're going to calculate, which you would think would be the paycheck or the cash that would go out for the paychecks. But this time, the paycheck didn't actually go out until January. But we owed it as of the end of the month and need to record it for this time period, so that our financial statements will be correct as of the end of the time period. So if we highlight the debits minus the credits, that's going to add up to $29.875.23. We're going to calculate that using our plug formula, which is the negative SUM. I'm going to use the keyboard the whole time here. So shift nine, hit the up arrow one time, hold down shift, left one time, and then up, up, up, up, up, up until we have the whole square. Then we could close it up. We don't need to, however, and we could just say enter and it'll close it up for us. As you can see, it put the ending brackets on here. So that's the 29.875.23. Let's double check that that is indeed our net check on the register. 29.875.23 looks good. Now let's post it then. We're going to go to account 502. Let's freeze the pain first. Let's freeze the pain now. So we're going to put our cursor on AD1, AD1. Then we're going to go to the view tab up top, windows grouped at the bottom of the ribbon, and then go to the freeze pain and freeze the pain. Okay, so then we're going to look for 502. Remember that's way at the bottom down here. It's down in the income and expense areas. It's going to be in the same area in the general ledger. So let's go to the rights. We've got the assets. We got the liabilities. We got the capital, capital, and then we've got the revenue and expenses. So we're down here in BM and BN. So this time it's going to be on 1231. Notice the difference in the pattern here. It's not on January 1st. It's on 121 because it's in essence an adjusting journal entry. And then in BN22 we're going to say equals. Scroll up just a bit so we can find our data and we're looking for that 4877.50 and enter. Now I'm going to put my cursor right to the left of the frozen cells and then go right so it should pop back over. And then we're looking for 215. 215 is here. Now we're going to record all these at the same time without coming back over here to the trial balance. So we're going to scroll right. We're looking for 215, 215. Where's 215? There it is. It's in columns AS and AT. So in AS18 we're going to say 1231 and then in AT18 we're going to say equals and 0.2 that AC6 and enter. Now we're looking for 220. That should be right next door, right next door 220. So we're going to pick that up in column AW and AX. We're in cell AW18, date 1231, in cell AX18 equals. And we're going to pick up the 697 for HI and enter. That's correct, right? HI. Okay, then we're going to go to let's see. Let's not miss one this time. We're going to go to the 225, 225. If we do miss one, that's okay. The double entry accounting system will let us know, but we'll try to get it right this time. So we're going to go on 225 and cell BE and BF. We're going to say 1231. And then in BF 14, we're going to say equals. And we're looking for that 225, that 840413 bringing the balance up to 840413. Note the patterns in our payable accounts here. It goes up and then it goes down. It goes up and then we paid it. It goes up and then we paid it. That should be the pattern just like it would be in an accounts payable type of account. So we're going to go then to 243. 243 looks like it's down here. And the date is going to be 1231 in row 25. And cell BF 25, we're going to say equals. Scroll back up just a bit. We're looking for that 243. We're picking up this 5,501 penny and enter. Okay, so now we're looking for 245. So 245 or account 245. And that's going to be in cell BI 10 date 1231. The amount is going to be equal to that 16 in AC 10 and enter. Now we're looking for 227, 247 in BI 25 date 1231. Then we're in cell BJ 25 equals and we're going to scroll up just a bit and pick up the retirement plan in AC 11 and enter. Okay, so now we're going to scroll back up and we just need to pick up that payroll payable account. So that one I believe is 213. I know it's 213, but it's to the left, I believe. And so it's down. It's going to be right here. So it's in AO, AO 24 AO AO. So that's going to be 1231. And then AP 24 will be equal to scrolling back up just a bit, we're picking up that 29, eight, 75, 23 and enter. So there is our balance. If we go right to the left side of the frozen pains and then go right, we'll pop back over to that trial balance and scroll down and see if we are in balance, which I hope we are. All right, we did it correctly this time. That means the debit's equal to credits with the green zeros. And the net income is affected here because the expenses went up. And we had to do it as a 1231 instead of January 1, which would be the normal routine in order to do an adjusting entry and pull this data into the proper pay period, the proper year for our financial statements reporting net income properly down by that payroll cycle and reporting the related liabilities. We need to do the same thing, of course, for the employer portion of payroll reporting the proper payroll tax expense in the proper time period and the liabilities related to it. So if we go back to our register over here, we're picking up now the pay employer stuff, which is the social security, the Medicare, the FUTA and the SUTA. And these two we've seen before because they're basically matching. We're going to record it again here for the employer portion. We already saw the employee portion coming out of the employee check. These two are employer only. Note that SUTA could have an employee portion as well. We currently are saying it does not here. It depends on the state. Okay, so we're going to go back and record this. It's going to be great. So we're going to be here. FUTA first, we're going to go to the liability side. We're in cell AC15. It's going to be a credit. So we're going to say negative instead of equals. Go back to the register and earnings and point to that OASDI. Then for the HI, we are in AC16. We're going to say negative. Go back to our register and point to the HI or Medicare. Now there's not going to be any FUTA or SUTA because that's been completed. So we can just put zero there. We don't even need the accounts. I'm just going to put zero there. We're not going to post it because we don't want to waste the time. We're going to be a little faster. So now we're going to do our negative sum formula. So negative sum is being the plug formula. We're going to do it all with the keyboard and shift F9 down one time, holding the shift down, right one time, holding shift down, down, down, down arrows three times. And we could close it up, but no need to. So we won't and enter. Okay. So now we're going to enter this data. I'm going to make it green just so we don't mix it up here. We only need these three. So I'll just highlight those three, right click on them and make them that light green. I'm picking up this light green right there. Nice light green so we can still see the numbers hopefully. So we're looking for 220. So here's 220 on the trial balance going to be in the same order on the general ledger. Scroll into the right to look for that 220. We've got the assets and then the liabilities. And then here's 220 of a FICA HI. Actually there's 215, oh 520. That's going to be all the way to the right because it's an expense account. And there it is 520, the payroll taxes. So here we go. Let's pick that one up first. That's going to be on 1231 in BQ 10 and the BR 10. We're going to say equals point to that 1507 93 bringing the expense up. Then we're going to go back to that 215, which is what I was looking for last time. And find the 215, which is going to be in the liabilities area. It's in cells or columns AS and AT. So we want to be here in AS 19 date 1231. Let's put it 1231. And then in AT 19 we're going to say equals point to that 810 81. Note the pattern. We got the employee portion the employee or portion from prior periods. Note the pattern employee portion employer portion paid it off employee portion employer portion paid off both employee portion employer portion paid off both. That's what it should look like if the pay rolls properly done. Hopefully that's what it looks like. So then we're going to go to the what's it 220. 220, which is right next door. There's 220. We want to be down here in AW 19 the date of 1231. And then in AX 19, we will say equals point to the 697 12. And there we have its same pattern here. Employee portion employer portion in the past we've seen employee portion employer portion paid off both employee and employer portion employee portion employer portion then paid off both employee and employer portion employee portion employer portion paid off both employee and employer portion. Okay, I'll stop. So then we're going to go back to the left side of the frozen pains. Click right one time and see if we're in balance. And it looks good. So we're in balance. And so now we've recorded the payroll expenses, which will bring down net income. And the prior transaction showed the payroll tax. Well, this one had the payroll tax expenses. And the last one had just the payroll expenses, which brings down net income. And then on the balance sheet, we have the liabilities related to both employee and employer portions. The part we took from the employee paycheck and owe to the government. And the part we took from our account and owe to the government our account as the employer I always think of ourselves as the employer when we work these problems. Okay, so then we're going to highlight this one. And ungreen I'm going to ungreen these that's what I'm down here. So I'm going to do that by selecting these cells at the bottom and we're going to paint brush it. So we'll go to the home tab. We'll go to the clipboard group and paint brush. And then we'll just paint brush these back to blue. Okay, then the last transaction notice I'm going to keep this one in January 15. I'm going to record it just so we can see what it'll be. And the reason we want to see it is because we're going to need it when we do the the year in documents, the 940s and 941s, we're going to need to know what we paid, we're going to need to know the payment to be able to apply it to the proper pay period. And that's generally going to be the case in payroll, meaning when we do the processing, we're going to we're going to do it a month later. So it's obviously we're not doing the quarter in payroll, right at December 31. It's probably going to be sometime in January that we process all this stuff. And therefore, we're going to know we've already we've already paid the payroll in January. And when we process it. And so we need to know what that is. I'm going to post it here. But we're not going to record it to to our trial balance, because this is our trial balance. I'm going to say as of the end of the year. So this is the end of the year trial balance. If we went to the journal entry for the next year, or the general ledger, we would see the data for the next year, which would include the payroll payment that we're going to need to apply to the 940 and 941s for this year's December's fourth quarter and year end of this year. So in any case, when we pay this off, the journal entry is going to include the fact that we're going to have to we're going to have to pay the FICA, OASDI and the HI. So these need to go down to zero when we pay it. So the debit's going to be 162161 for self security or OASDI. For HI, it's going to be 1394.24. For FIT, it's going to be 8404.13. And then the checking accounts going to be the credit. Now note, what we didn't do is reverse the payroll payable. And that's going to be done as part of the adjusting process. So we might have a reversing entry, probably would be the best way to do it as of January 1. We're not going to get into reversing entries now. So but we could do it. We could do it that way. What we're doing now is just the normal payroll processing paying off the liability so that we can report that on the payroll forms, the quarter leaves and the year end. So I'm going to do this with a negative sum and then shift nine up one time left one time shift left one time and then up two times just selecting that area and enter. So there we have it. Again, we're not going to post this here because this is just the data for the end of the year, but we need to note this so that we can use it for our payroll documentation.