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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
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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