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Chapter 5 A problems Page 2

# Chapter 5 A problems Page 2 - 5-7A LO 3,4 In April of the...

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Unformatted text preview: 5-7A LO 3,4. In April of the current year, Freeman Steel Company transferred Herb Porter from its factory in Tennessee to its plant in South Carolina. The company’s SUTA tax rates based on its experience ratings are 3.2% in Tennessee and 3.8% in South Carolina. Both states base the tax on the first \$7,000 of each employee’s earnings. This year, Freeman Steel Company paid Herb Porter wages of \$9,900; \$2,800 were paid in Tennessee and the remainder in South Carolina. Compute: 5-8A l0 4. During 2010, Jeff Smallwood worked for two different employ» ers. Until May, he worked for Rowland Construction Company in Cincinnati, Ohio, and earned \$22,000. The state unemploy- ment rate for Rowland is 4.6%. He then changed jobs and worked for Ford Improvement Company in Louisville, Kentucky, and earned \$29,500. The state unemployment rate for Ford is 5-9A LO 3,4. The partnership of Keenan and Kludlow paid the Following wages during this year: M. Keenan (partner) ........................ S. Kludlow (partner) ........................ N. Perry (supervisor) ....................... T. Lee (factory worker) .................... R. Rolf (factory worker) ................... D. Broch (factory worker) S. Ruiz (bookkeeper) C. Rudolph (maintenance) In addition, the partnership owed \$200 to Rudolph 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: 5-IOA LO 3,4. Peroni Company paid wages of \$170,900 this year. Of this amount, \$114,000 was taxable for net FUTA and SUTA pur- poses. The state’s contribution tax rate is 3.1% for Peroni 0. Amount of credit the company would receive against the FUTA tax for its SUTA contributions ........... \$ Egg-LU) I). Amount that Peroni Company would pay to the federal gov— ernment for its FUTA tax .............................. \$ \ 1b\$ M0 5-1 !A LO 3,4. During 2010, Jordan Company was subject to the Alaska state unemployment tax of 4.2%. The company’s taxable It. SUTA tax that Jordan Company would pay to the state of Alaska ............................................................ \$ 7 131.00 I). Net FUTAtaxfor 2010 ................................. \$ igj 37.120 ll. Amount of SUTA. tax the company must pay to Tennessee on Porter’s wages ............................................ \$ 8 [it 00 II. Amount of SUTA tax the company must pay to South Carolina on Porter’s wages ............................. 3? [E0 .610 I. Amount of the net FUTA tax on Porter’s Wﬂgﬂs .............................................................. \$ Eb I 00 5.1%. Determine the unemployment taxes (FUTA and SUTA) that would be paid by: s 1110.00 \$ Limos u. Rowland Construction Company .................. b. Ford improvement Company ........................ \$85,000 75,000 53,000 34,600 29,800 6,900 25,400 5,100 II. Net FUTA tax for the partnership for this year ......................................................... II. SUTA tax for this year ................................... \$ 333.00 \$ 11”.“:ng Company. Due to cash ﬂow problems, the company did not make any SUTA payments until after the Form 940 ﬁling date. Compute: (. Amount that the company lost because of its late payments .................................................... \$ 33 3.40 earnings for FUTA were \$86,700 and for SUTA, \$171,000. Compute: (. Amount of employees’ unemployment tax for 2010 (use the employee’s tax rate shown in Figure 5-1 on page 5—12) ............................................... \$ YES-00 5-32 ...
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