Note: For this textbook edition the rate 0.6% was used for the net FUTA tax rate for employers. Example 5-7 Shu Company located in Arkansas had FUTA taxable wages of $130,000 and SUTA taxable wages (on first $10,000) were $210,000 with a 0.9 percent SUTA tax rate. The total unemployment taxes that Shu Company is liable for are: FUTA tax – $130,000 × 0.6% = $780 SUTA tax – $210,000 × 0.9% = 1,890 Total unemployment taxes $2,670 Due to its experience rating, Ianelli, Inc., is required to pay unemployment taxes on its payroll as follows: Under SUTA for Massachusetts on taxable payroll of $18,000, the contribution rate is 4%. Under SUTA for New Hampshire on taxable payroll of $24,000, the contribution rate is 6.65%. Under SUTA for Maine on taxable payroll of $79,000, the contribution rate is 2.9%. Under FUTA, the taxable payroll is $103,500. Compute the following: a. SUTA taxes paid to Massachusetts b. SUTA taxes paid to New Hampshire c. SUTA taxes paid to Maine d. FUTA taxes paid
Note: For this textbook edition the rate 0.6% was used for the net FUTA tax rate for employers. Example 5-7 Shu Company located in Arkansas had FUTA taxable wages of $130,000 and SUTA taxable wages (on first $10,000) were $210,000 with a 0.9 percent SUTA tax rate. The total unemployment taxes that Shu Company is liable for are: FUTA tax – $130,000 × 0.6% = $780 SUTA tax – $210,000 × 0.9% = 1,890 Total unemployment taxes $2,670 Due to its experience rating, Ianelli, Inc., is required to pay unemployment taxes on its payroll as follows: Under SUTA for Massachusetts on taxable payroll of $18,000, the contribution rate is 4%. Under SUTA for New Hampshire on taxable payroll of $24,000, the contribution rate is 6.65%. Under SUTA for Maine on taxable payroll of $79,000, the contribution rate is 2.9%. Under FUTA, the taxable payroll is $103,500. Compute the following: a. SUTA taxes paid to Massachusetts b. SUTA taxes paid to New Hampshire c. SUTA taxes paid to Maine d. FUTA taxes paid
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Note: For this textbook edition the rate 0.6% was used for the net FUTA tax rate for employers.
Example 5-7
Shu Company located in Arkansas had FUTA taxable wages of $130,000 and SUTA taxable wages (on first $10,000) were $210,000 with a 0.9 percent SUTA tax rate. The total
| FUTA tax – $130,000 × 0.6% | = | $780 |
| SUTA tax – $210,000 × 0.9% | = | 1,890 |
| Total unemployment taxes | $2,670 |
Due to its experience rating, Ianelli, Inc., is required to pay unemployment taxes on its payroll as follows:
- Under SUTA for Massachusetts on taxable payroll of $18,000, the contribution rate is 4%.
- Under SUTA for New Hampshire on taxable payroll of $24,000, the contribution rate is 6.65%.
- Under SUTA for Maine on taxable payroll of $79,000, the contribution rate is 2.9%.
- Under FUTA, the taxable payroll is $103,500.
Compute the following:
| a. SUTA taxes paid to Massachusetts | |
| b. SUTA taxes paid to New Hampshire | |
| c. SUTA taxes paid to Maine | |
| d. FUTA taxes paid |
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