Payroll Accounting Chapter 5
a. Yes b. 38.10
Cowen Company began its operations in August of the current year. During August and September, the company paid wages of $2,450. For the last quarter of the year, the taxable wages paid amounted to $3,900. None of the employees were paid more than $7,000 this year. a. Is Cowen Company liable for FUTA tax this year? b. What is the net FUTA tax? Round your answer to the nearest cent. $
a. Yes b. 528.60
Donner Company began its operations in September of the current year. During September, the company paid wages of $23,400. For the last quarter of the year, the taxable wages paid amounted to $64,700. None of the employees was paid more than $7,000 this year. a. Is Donner Company liable for FUTA tax this year? b. If your answer to part a above is "Yes", what is the net FUTA tax for the year? Round your answer to the nearest cent. $
a. 720 b. 1596 c. 2291 d. 621
Due to its experience rating, Ianelli, Inc., is required to pay unemployment taxes on its payroll as follows: Under SUTA for Massachusetts on taxable payroll of $18,000, the contribution rate is 4%. Under SUTA for New Hampshire on taxable payroll of $24,000, the contribution rate is 6.65%. Under SUTA for Maine on taxable payroll of $79,000, the contribution rate is 2.9%. Under FUTA, the taxable payroll is $103,500. Compute the following: a. SUTA taxes paid to Massachusetts $______ b. SUTA taxes paid to New Hampshire $_____ c. SUTA taxes paid to Maine $_____ d. FUTA taxes paid $______
a. 1092 b. 2058.50 c. 2665 d. 567
Due to its experience rating, Ianelli, Inc., is required to pay unemployment taxes on its payroll as follows: Under SUTA for New Mexico on taxable payroll of $28,000, the contribution rate is 3.9%. Under SUTA for Colorado on taxable payroll of $23,000, the contribution rate is 8.95%. Under SUTA for Utah on taxable payroll of $65,000, the contribution rate is 4.1%. Under FUTA, the taxable payroll is $94,500. Compute the following; round your answers to the nearest cent. a. SUTA taxes paid to New Mexico $ b. SUTA taxes paid to Colorado $ c. SUTA taxes paid to Utah $ d. FUTA taxes paid $
a. 462 b. 4851 c. 5313
During the year, Zeno Company has a SUTA tax rate of 6.3%. The taxable payroll for the year for FUTA and SUTA is $77,000. Compute: a. Net FUTA tax $ b. Net SUTA tax $ c. Total unemployment taxes $ Feedback a. FUTA Taxable payroll times FUTA rate b. SUTA Taxable payroll times SUTA rate c. Total unemployment taxes
a. 407.40 b. 3104.30
Garrison Shops had a SUTA tax rate of 3.7%. The state's taxable limit was $8,000 of each employee's earnings. For the year, Garrison Shops had FUTA taxable wages of $67,900 and SUTA taxable wages of $83,900. Compute: Round your answers to the nearest cent. a. Net FUTA tax $ b. Net SUTA tax $
a. $1015 b. $2235
As of June 30, 2017 (the computation date for the 2018 tax rate), Amanda Company had a negative balance of $1,015 in its unemployment reserve account in State A. The company's average payroll over the last three 12-month periods amounted to $525,000. The unemployment compensation law of State A provides that the tax rate of an employer who has a negative balance on the computation date shall be 7.2% during the following calendar year. Using the tax rate schedule presented below, compute the following: Reserve Ratio Contribution Rate 0.0% or more, but less than 1.0% 6.7% 1.0% or more, but less than 1.2% 6.4% 1.2% or more, but less than 1.4% 6.1% 1.4% or more, but less than 1.6% 5.8% 1.6% or more, but less than 1.8% 5.5% 1.8% or more, but less than 2.0% 5.2% 2.0% or more, but less than 2.2% 4.9% 2.2% or more, but less than 2.4% 4.6% 2.4% or more, but less than 2.6% 4.3% 2.6% or more, but less than 2.8% 4.0% 2.8% or more, but less than 3.0% 3.7% 3.0% or more, but less than 3.2% 3.4% 3.2% or more 3.1% a. The smallest voluntary contribution that Amanda Company should make in order to effect a change in its tax rate. $__________ b. The amount of the tax savings as a result of the voluntary contribution if Amanda Company's taxable payroll for 2018 is $650,000. $___________ Feedback a. The company's smallest voluntary contribution would be the amount to bring their negative unemployment balance to zero. b. Tax without voluntary contribution minus tax with voluntary contribution = tax decrease resulting from voluntary contribution, then subtract voluntary contribution (calculated in part a) = Tax savings realized.
a. 158.40 b. 77.90 c. 42
In April of the current year, Steelman Press Company transferred Ken Sherm from its factory in Louisiana to its plant in Florida. The company's SUTA tax rates based on its experience ratings are 3.2% in Louisiana and 3.8% in Florida. The taxable wage limits are $7,700 in Louisiana and $7,000 in Florida. This year, Steelman Press Company paid Ken Sherm wages of $14,190; $4,950 were paid in Louisiana and the remainder in Florida. Compute the following; round your answers to the nearest cent. a. Amount of SUTA tax the company must pay to Louisiana on Sherm's wages $ b. Amount of SUTA tax the company must pay to Florida on Sherm's wages $ c. Amount of the net FUTA tax on Sherm's wages $ Feedback a. SUTA Taxable payroll times respective SUTA rate b. SUTA Taxable payroll times respective SUTA rate (Hint: Consider credit for wages earned in another state). c. Multiply taxable FUTA payroll times net FUTA rate; add FUTA Taxable wages (in credit reduction state) times credit reduction rate = Net FUTA tax
a. 1102.44 b. 7533.34
In September 2018, Painter Wax Corporation began operations in a state that requires new employers of one or more individuals to pay a state unemployment tax of 4.1% of the first $7,000 of wages paid each employee. An analysis of the company's payroll for the year shows total wages paid of $212,640. The salaries of the president and the vice president of the company were $25,000 and $15,000, respectively, for the four-month period, but there were no other employees who received wages in excess of $7,000 for the four months. Included in the total wages were $900 paid to a director who only attended director meetings during the year, $6,300 paid to the factory superintendent, and $2,000 in employee contributions to a cafeteria plan made on a pretax basis-for both federal and state. In addition to the total wages of $212,640, a payment of $2,000 was made to Andersen Accounting Company for an audit it performed on the company's books in December 2018. Compute the following; round your answers to the nearest cent. a. Net FUTA tax $ b. SUTA tax $ Feedback a. To calculate FUTA Taxable wages; Take total wages less Director's salary, less wages in excess of $7,000 per employee and less Pretax cafeteria plan contributions; multiply resulting FUTA taxable wages by net FUTA rate b. To calculate SUTA Taxable wages; Take total wages less Director's salary, less wages in excess of $7,000 per employee and less Pretax cafeteria plan contributions; multiply resulting SUTA taxable wages by SUTA rate
Name OASDI HI M.G. $0 $0 (bc partner) P. M. $0 $0 (bc partner) T.B $44.35 $10.37 W.A. $35.77 $8.37 K.B. $17.36 $4.06 J.V. $21.70 $5.08 A.A. $14.88 $3.48 b.) taxable payroll $2162.30 OASDI $134.06 HI $31.35 c) $7.80 d.) $0 e.) $173.21
Mary Givens and Peggy Moser are partners engaged in operating The G&M Doll Shop, which has employed the following persons since the beginning of the year: T. Binn (general office worker) $3,100/month W. Ashworth (saleswoman) $30,000 per year K. Bitner (stock clerk) $280 per week J. Vern (deliveryman) $350 per week A. Axel (cleaning and maintenance, part-time) $240 per week Givens and Moser are each paid a weekly salary allowance of $1,000. The doll shop is located in a state that requires unemployment compensation contributions of employers of one or more individuals. The company is subject to state contributions at a rate of 3.25% for wages not in excess of $10,000. Compute each of the following amounts based upon the 41st weekly payroll period ending October 12, 2018. Round your intermediate calculations and final answers to the nearest cent. If an amount is zero, enter "0". a. Amount of FICA taxes (OASDI and HI) to be withheld from the earnings of each person. Taxable Earnings M. Givens $1,000.00 P. Moser 1,000.00 T. Binn $715.38 W. Ashworth 576.92 K. Bitner 280.00 J. Vern 350.00 A. Axel 240.00 b. Amount of the employer's FICA taxes for the weekly payroll. Taxable payroll $_________ OASDI $____________ HI $_____________ c. Amount of state unemployment contributions for the weekly payroll.$___________ d. Amount of the net FUTA tax on the payroll. $________________ e. Total amount of the employer's payroll taxes for the weekly payroll. $____________________ Feedback a. Calculate the employees' OASDI and HI, considering the pay period and considering partner's salary is not tax under FICA. b. Calculate employer's FICA taxes (OASDI and HI). c. Determine SUTA taxable wages and multiply by SUTA rate. (Hint: consider SUTA ceiling). (Calculate how much each employee had made prior year to date (multiply gross x number of prior payrolls) to see whether or not the employee has capped. Only calculate SUTA for those that have not capped.) d. Determine FUTA taxable wages and multiply by net FUTA rate. (Hint: consider FUTA ceiling). (Calculate how much each employee had made prior year to date (multiply gross x number of prior payrolls) to see whether or not the employee has capped. Only calculate FUTA for those that have not capped.) e. Total employer's payroll taxes for the pay period.
a. 1.87% b. 5.2% c. $1440 d. $2445
Reserve Ratio Contribution Rate 0.0% or more, but less than 1.0% 6.7% 1.0% or more, but less than 1.2% 6.4% 1.2% or more, but less than 1.4% 6.1% 1.4% or more, but less than 1.6% 5.8% 1.6% or more, but less than 1.8% 5.5% 1.8% or more, but less than 2.0% 5.2% 2.0% or more, but less than 2.2% 4.9% 2.2% or more, but less than 2.4% 4.6% 2.4% or more, but less than 2.6% 4.3% 2.6% or more, but less than 2.8% 4.0% 2.8% or more, but less than 3.0% 3.7% 3.0% or more, but less than 3.2% 3.4% 3.2% or more 3.1% Conrad Company, which is located in State A, had an average annual payroll of $1,150,000 for the three 12-month periods ending on June 30, 2017 (the computation date for the tax year 2018). As of June 30, 2017, the total contributions that had been made to Conrad Company's reserve account, in excess of the benefits charged, amounted to $21,560. Compute the following: a. Conrad Company's reserve ratio for 2017. Round your answer to two decimal places._________% b. 2018 contribution rate for the company. Round your answer to one decimal place. ______% c. Smallest contribution that the company can make in order to reduce its tax rate if State A permits voluntary contributions. $__________ d. Tax savings realized by the company, taking into consideration the voluntary contribution made in (c) if the taxable payroll in 2018 is $1,295,000. $_________________ Feedback a. Divide reserve account balance by annual payroll = Reserve Ratio (expressed as a percentage) b. Using table, look up Reserve Ratio (calculated in part a above) to determine Contribution Rate. c. In order to qualify for lower Contribution rate, multiply annual payroll by the reserve ratio (at the desired Contribution rate); then subtract actual reserve account balance = Contribution needed. d. Tax without voluntary contribution minus tax with voluntary contribution = tax decrease resulting from voluntary contribution; then subtract voluntary contribution (calculated in part c) = Tax savings realized.
a. 9636.83 b. 1997.17 c. 833.77
Roofling Company paid wages of $319,600 this year. Of this amount, $193,900 was taxable for net FUTA and SUTA purposes. The state's contribution tax rate is 4.3% for Roofling Company. Due to cash flow problems, the company did not make any SUTA payments until after the Form 940 filing date. Compute the following; round your answers to the nearest cent. a. Amount of credit the company would receive against the FUTA tax for its SUTA contributions $ _______________ b. Amount that Roofling Company would pay to the federal government for its FUTA tax $ _______________ c. Amount that the company lost because of its late payments $ ________________ Feedback a. (Taxable wages x SUTA rate x 90%) + [Taxable wages x (5.4% -SUTA rate)] = Total FUTA tax credit b. (Taxable wages x FUTA rate) - Total FUTA tax credit (part a above) = Net FUTA tax c. Net FUTA tax - FUTA tax without penalty = penalty
a. 233.40 b. 1439.90
The partnership of Cox and Cohen paid the following wages during this year: M. Cox (partner) $45,000 S. Cohen (partner) 26,000 N. Tate (supervisor) 14,350 T. Gerenski (factory worker) 9,900 R. Sobowski (factory worker) 9,450 D. Brunder (factory worker) 8,910 S. Carsoni (bookkeeper) 11,100 C. Chu (maintenance) 3,900 In addition, the partnership owed $200 to Chu for work he performed during December. However, payment for this work will not be made until January of the following year. The state unemployment tax rate for the company is 2.95% on the first $9,000 of each employee's earnings. Compute: Round your answers to the nearest cent. a. Net FUTA tax for the partnership for this year $ b. SUTA tax for this year $ Feedback a. Gross payroll; less partner's wages, less salaries above FUTA ceiling; multiply by net FUTA rate. (Ignore pending payment) b. Gross payroll; less partner's wages, less salaries above SUTA ceiling; multiply by SUTA rate. (Ignore pending payment)
a. 2289.12 b. 11,064.08 c. 13,353.20
Yengling Company's payroll for the year is $593,150. Of this amount, $211,630 is for wages paid in excess of $7,000 to each individual employee. The SUTA rate in Yengling Company's state is 2.9% on the first $7,000 of each employee's earnings. Compute: Round your answers to the nearest cent. a. Net FUTA tax $ b. Net SUTA tax $ c. Total unemployment taxes $
