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?

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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Note: For this textbook edition the rate 0.6% was used for the net FUTA tax rate for employers.

 

Example 5-4

Total taxable earnings (above example)   $49,290.00
Net rate of tax (6.0% − 5.4%)   × 0.6%
Amount of net FUTA tax   $295.74

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.
$fill in the blank 2

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