A.docx - A Since Sanchez company is having a negative...

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A Since Sanchez company is having a negative balance of $1,150, hence a tax rate of 7.2% is applicable, in order to change the rate the company should a-tleast attain minimum reserve ratio of 0% Thus a contribution of $1,150 would be required. (Since -1150+1150=0) Opening balance of contribution ($1,150) Contributions $1,150 Net Balance $0 Average Annual payroll $510,000 Reserve ratio (0/510,000*100) 0 Tax rate applicable 6.70% Payroll profits of 2017 $650,000 Tax payment with no contribution @ 7.2% $46,800.0 Minimum Contribution $1,150 Tax payment with minimum contribution @ 6.7%
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