AC116 Unit 7 Payroll Register Exercise Example

Reviewed by Chester Goodwin, MBA Accounting II Purdue University Global Free custom sample in 24 to 48h

One weekly pay run for four warehouse employees is computed across a payroll register in this AC116 Unit 7 payroll register exercise at Ridgeline, a composite orchard supply company. Purdue Global AC 116, Accounting II, uses payroll to show BS in Accounting students that one event creates two expenses: wages and the employer's own taxes. Two employees earn overtime at time and a half, and the register withholds Social Security at 6.2 percent, Medicare at 1.45 percent, federal and state income tax, health premiums and retirement contributions. Gross pay of $3,140.00 becomes net pay of $2,435.97, proved against the deductions. The employer's matching taxes and unemployment taxes add $343.83. Two entries record the run, and a section explains why most deductions are liabilities rather than costs.

CourseAC116 Accounting II
UnitUnit 7
Paper typePayroll register exercise
LengthAbout 600 words, 5 pages double-spaced
FormatAPA 7 student paper
SchoolPurdue University Global
ProgramBS in Accounting
UpdatedOctober 2026

Free sample paper for AC116 Unit 7

1

Four Warehouse Employees, Two Expenses: A Unit 7 Payroll Register and the Entries One Pay Run Creates

[Student Name]

Purdue University Global

AC116: Accounting II

Unit 7 Payroll Register Exercise

[Instructor Name]

[Date]

Ridgeline Orchard Supply, Inc., its employees, hours, rates and the state rates are composite; the federal rates and publications cited are real.

What this part is doingGiving gross, net and the employer's added cost in the lead shows the grader both expenses of the pay run are covered.
2

Rates and Rules Used

Week ended January 9. Hours past 40 in the week earn time and a half. Social Security 6.2 percent and Medicare 1.45 percent of gross pay, withheld from employees and matched by the employer (Internal Revenue Service, 2025). Federal income tax withheld from the amounts the problem supplies from the wage bracket tables. State income tax at a flat 3 percent. Federal unemployment tax at 0.6 percent, the 6.0 percent rate after the full state credit, on each employee's first $7,000 of wages; state unemployment tax at 2.7 percent on the first $9,000. Every employee is well below each ceiling in the second week of January, and far below the $176,100 Social Security wage base for the year (Social Security Administration, 2024).

The Register

Dana, warehouse lead: 44 hours at $24.00. Regular pay $960.00; overtime 4 hours at $36.00, $144.00; gross $1,104.00. Social Security $68.45; Medicare $16.01; federal income tax $92.00; state income tax $33.12; health premium $40.00; retirement contribution at 4 percent, $44.16. Total deductions $293.74. Net pay $810.26.

Marco, order picker: 40 hours at $19.50. Gross $780.00. Social Security $48.36; Medicare $11.31; federal $54.00; state $23.40; health $40.00. Total deductions $177.07. Net pay $602.93.

Ji-woo, receiving clerk: 46 hours at $18.00. Regular $720.00; overtime 6 hours at $27.00, $162.00; gross $882.00. Social Security $54.68; Medicare $12.79; federal $61.00; state $26.46; retirement at 3 percent, $26.46. Total deductions $181.39. Net pay $700.61.

Priscilla, part-time counter clerk: 22 hours at $17.00. Gross $374.00. Social Security $23.19; Medicare $5.42; federal $12.00; state $11.22. Total deductions $51.83. Net pay $322.17.

Totals and Proof

Gross pay $3,140.00. Social Security $194.68. Medicare $45.53. Federal income tax $219.00. State income tax $94.20. Health premiums $80.00. Retirement $70.62. Total deductions $704.03. Net pay $2,435.97.

Proof: $3,140.00 minus $704.03 equals $2,435.97, which agrees with the sum of the four net pay figures.

Employer Payroll Taxes

1. Social Security match: $194.68.

2. Medicare match: $45.53.

3. Federal unemployment: $3,140.00 times 0.6 percent, $18.84.

4. State unemployment: $3,140.00 times 2.7 percent, $84.78.

Total employer taxes: $343.83.

Entry 1: Recording the Payroll

Jan. 9. Wages Expense, debit $3,140.00. Credits: Social Security Taxes Payable $194.68; Medicare Taxes Payable $45.53; Federal Income Taxes Payable $219.00; State Income Taxes Payable $94.20; Health Insurance Premiums Payable $80.00; Retirement Contributions Payable $70.62; Wages Payable $2,435.97.

Entry 2: Recording the Employer's Taxes

Jan. 9. Payroll Tax Expense, debit $343.83. Credits: Social Security Taxes Payable $194.68; Medicare Taxes Payable $45.53; Federal Unemployment Taxes Payable $18.84; State Unemployment Taxes Payable $84.78.

The pay run costs Ridgeline $3,483.83, not $3,140.00, because Ridgeline matches every withheld Social Security and Medicare dollar and also owes federal and state unemployment tax on the same wages.

What this part is doingThe highlighted sentence states the two-expense idea in one figure, which is the central point of the unit.
3

What the Withholdings Mean

Most of the deductions are not costs to Ridgeline at all. They are amounts the company collects from employees and owes to the government, the insurer and the retirement plan, which is why they are recorded as liabilities until paid (Franklin et al., 2019). Social Security now appears twice in the payables, $389.36 in total, half withheld from employees and half owed by the employer. When Ridgeline deposits these amounts, each payable is debited and cash credited. Late deposits bring penalties, so the payables should be cleared on the schedule the company's deposit rules require.

What this part is doingExplaining why deductions are liabilities rather than expenses shows understanding beyond the arithmetic of the register.
4

References

Franklin, M., Graybeal, P., & Cooper, D. (2019). Principles of accounting, volume 1: Financial accounting. OpenStax. https://openstax.org/details/books/principles-financial-accounting

Internal Revenue Service. (2025). Employer's tax guide (Publication 15, Circular E). https://www.irs.gov/publications/p15

Social Security Administration. (2024). 2025 Social Security changes. https://www.ssa.gov/news/press/factsheets/colafacts2025.pdf

AC116 Unit 7 instructions, in plain terms

The seventh AC116 unit supplies a staff roster with hours, rates and withholding information and asks for a payroll register and journal entries. Compute regular pay, overtime at the stated multiple for hours beyond forty, and gross pay for each employee. Then compute each deduction: federal income tax from the table or amount given, Social Security and Medicare at the stated rates, state tax and any voluntary deductions. Net pay closes each row. Total every column and prove that gross pay minus deductions equals net pay. Then work out what the company owes on top: a matching amount for each of the two FICA taxes plus federal and state unemployment tax, watching the wage ceilings. Record two entries, one for the payroll and one for the employer's taxes. Expect two pages. Cite IRS guidance in APA 7.

How the AC 116 Unit 7 example is put together

The sample states the week, the overtime rule and each rate, including the unemployment ceilings and the Social Security wage base. The register follows employee by employee: a warehouse lead with four overtime hours, an order picker, a receiving clerk with six overtime hours and a part-time counter clerk. Each row lists gross pay, six possible deductions and net pay. Totals and a proof follow. The employer's taxes are computed in four lines totaling $343.83. Entry 1 debits Wages Expense and credits seven payables; Entry 2 debits Payroll Tax Expense and credits four. The highlighted sentence gives the run's full cost of $3,483.83. A closing section explains that withholdings are liabilities and why deposit timing matters.

Where the points sit in the AC116 Unit 7 rubric

Payroll exercises are graded on correct pay and deductions for every employee, correct totals and correct entries. Overtime must use the right rate and hours. Social Security and Medicare must be rounded consistently. The proof that gross minus deductions equals net is often a separate rubric item. The employer's share must be recorded in its own entry as payroll tax expense, not mixed into wages expense. Wage ceilings must be respected where the problem gives year-to-date earnings. Each payable should be named clearly. A brief explanation of liabilities versus expenses earns interpretation credit. Accurate figures and APA 7 citations close the grade.

AC116 Unit 7 help: mistakes that cost points

The most common payroll error is computing overtime at time and a half for all hours instead of only those over forty. Others record the employer's Social Security and Medicare as deductions from the employee. Unemployment taxes are applied to wages above the ceiling. Net pay is computed without voluntary deductions. The two entries are combined into one, hiding the employer's added cost. Rounding differs between rows and totals. If your roster has overtime, voluntary deductions or ceilings that complicate the register, our team can compute it and record both entries from your problem.

Get an AC116 Unit 7 example written to your instructions

Hours, pay rates, year-to-date earnings, withholding elections and any wage ceilings from your Unit 7 roster are the inputs; send them with the rubric and whatever the instructions say about remittance. The register and both entries come back inside 24-48h, proof line included, with no fee on a first custom sample. The paper above is an original model document written by our desk, not a submitted student paper and not an official Purdue University Global document.

Request this unit free All AC116 units Finished samples

More AC116 papers and BS in Accounting samples

AC116 Unit 7 questions, answered

Why is the employer's share not on the employee's row?

Because the employee never sees it deducted. Social Security and Medicare are paid twice, once withheld from the worker and once matched by the employer, and unemployment taxes fall on the employer alone. Keeping the employer's amounts in a separate table keeps net pay correct and makes the second journal entry easy to trace. Most AC116 problems are built to test that separation.

Do I need year-to-date earnings for this exercise?

When a problem mentions wage ceilings, yes. An employee who has already earned past the unemployment ceiling owes nothing further for the year on those taxes, and year-to-date totals are how the register shows it. AC116 problems often include one such employee on purpose. If the problem gives no year-to-date figures, the sample assumes nobody has crossed a ceiling and says so.

Should the rates in the sample match current law?

They match the problem. Textbook problems often use rounded or dated percentages so the arithmetic stays clean, and graders mark against the rates stated in the facts, not against this year's figures. The sample cites each rate from the problem in a note under the register so any difference from current law is visibly deliberate.

Where can I find a free AC116 Unit 7 sample paper?

This page offers a complete AC116 Unit 7 payroll register for four warehouse employees, with overtime, deductions, net pay, the employer's taxes and both journal entries.

What does the pay run really cost in the AC116 Unit 7 sample?

$3,483.83. Gross pay is $3,140.00, and the employer adds $343.83 for its matching Social Security and Medicare and its federal and state unemployment taxes.