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PAYROLL CH5 ANSWERS - Chapter 5 51 Solutions-Series A...

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Chapter 5 5–1 Solutions—Series A Problems 5–1A. (a) Net FUTA tax ........................................... $67,000 × 0.008 = $ 536.00 (b) Net SUTA tax ........................................... $67,000 × 0.059 = 3,953.00 (c) Total unemployment taxes ................................................. $4,489.00 5–2A. Earnings subject to FUTA and SUTA: $737,910 – $472,120 = $265,790 (a) Net FUTA tax .......................................... $265,790 × 0.008 = $2,126.32 (b) Net SUTA tax ......................................... $265,790 × 0.029 = 7,707.91 (c) Total unemployment taxes ................................................. $9,834.23 5–3A. (a) Net FUTA tax ............................................ $67,900 × 0.008 = $ 543.20 (b) Net SUTA tax ........................................... $83,900 × 0.037 = $3,104.30 5–4A. (a) SUTA taxes paid to Illinois ..................... $18,000 × 0.04 = $ 720.00 (b) SUTA taxes paid to Indiana .................... $24,000 × 0.0265 = $ 636.00 (c) SUTA taxes paid to Ohio ........................ $79,000 × 0.029 = $ 2,291.00 (d) FUTA taxes paid ................................... $103,500 × 0.008 = $ 828.00 5–5A. (a) Yes. Boxon Company meets the test of having paid wages totaling more than $1,500 during any calendar quarter of the current year. (b) Taxable wages ....................................... $6,950 + $12,910 = $19,860.00 Net FUTA tax ............................................ $19,860 × 0.008 = $ 158.88 5–6A. FUTA taxable wages: Total wages ......................................................................... $ 177,610 Less: Director’s salary ........................................................ (900) Less: Nontaxable portion of president’s and vice president’s salaries .................................................. (21,000) Less: Pretax cafeteria plan contributions ........................... (2,000 ) Taxable wages .................................................................... $ 153,710 (a) Net FUTA tax: $153,710 × 0.008 ........................................ $ 1,229.68 SUTA taxable wages: Total wages ......................................................................... $ 177,610 Less: Director’s salary ........................................................ (900) Less: Nontaxable portion of president’s and vice president’s salaries .................................................. (21,000) Less: Pretax cafeteria plan contributions ........................... (2,000 ) Taxable wages .................................................................... $ 153,710
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5–2 Payroll Accounting (b) SUTA tax: $153,710 × 0.035 .............................................. $5,379.85 5–7A. (a) $2,800 × 0.032 = $89.60 (b) $4,200 × 0.038 = $159.60 (c) $7,000 × 0.008 = $56.00 5–8A. (a) FUTA tax .......................................................... $7,000 × 0.008 = $ 56.00 SUTA tax .......................................................... $9,000 × 0.046 = 414.00 Total = $470.00 (b) FUTA tax .......................................................... $7,000 × 0.008 = $ 56.00 SUTA tax .......................................................... $8,000 × 0.051 = 408.00 Total = $464.00 5–9A. (a) Gross payroll ....................................................................... $ 94,700 Less: Payroll to partners (nontaxable) ............................... (40,000) Less: Salaries beyond $7,000 limit ..................................... (15,200 ) Taxable payroll ................................................................... $ 39,500 FUTA tax rate ..................................................................... × 0.008 FUTA tax ............................................................................. $ 316 (b) Gross payroll ....................................................................... $ 94,700 Less: Payroll to partners (nontaxable) ............................... (40,000) Less: Salaries beyond $9,000 limit ..................................... (6,300 ) Taxable payroll ................................................................... $ 48,400 SUTA tax rate ..................................................................... × 0.0215 SUTA tax ............................................................................. $1,040.60 5–10A. (a) $114,000 × 0.031 × 90% .................................................... $3,180.60 $114,000 × 0.023 (additional credit to 5.4%) ..................... 2,622.00 Total FUTA tax credit .......................................................... $5,802.60 (b) $114,000 × 0.062 ................................................................ $7,068.00 Less: Credit against tax [see (a) above] ............................. (5,802.60 ) Net FUTA tax ...................................................................... $1,265.40 (c) Net FUTA tax ...................................................................... $1,265.40 FUTA tax without penalty: $114,000 × 0.008 ..................... 912.00 Penalty ................................................................................ $ 353.40 5–11A. (a) $171,000 × 0.042 = $7,182 (b) $ 86,700 × 0.008 = $693.60 (c) $171,000 × 0.005 = $855.00
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Chapter 5 5–3 5–12A. (a) $17,440 ÷ $850,000 = 2.05% (b) 4.9% (c) Balance needed to qualify for 4.6% rate: $850,000 × 0.022 = $ 18,700 Less: Actual balance ........................................................... 17,440 Contribution needed ........................................................... $ 1,260 (d) Tax without voluntary contribution ......... $980,000 × 0.049 = $ 48,020
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