Note: For this textbook edition the rate 0.6% was used for the net FUTA tax rate for employers.Example 5-7Shu 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%=$780SUTA tax – $210,000 × 0.9%=1,890Total unemployment taxes $2,670During the year, Plum Company has a SUTA tax rate of 4.8%. The taxable payroll for the year for FUTA and SUTA is $123,600. Compute:Round your answers to the nearest cent.a. Net FUTA tax$fill in the blank 1b. Net SUTA taxfill in the blank 2c. Total unemployment taxes$fill in the blank 3 16. PR.05.02A.EXCEL.ALGO

Formula: Total Unemployment taxes = Net FUTA tax + Net SUTA taxA ) Net FUTA tax: = Taxable payroll x FUTA rate = 123600 x 0.6 % = $ 741.6 B ) Net SUTA tax: = Taxable payroll x SUTA rate = 123600 x 4.8 % = $ 5932.8 C ) Total Unemployment taxes = Net FUTA tax + Net SUTA tax = 741.6 + 5932.8 = $ 6674.4

Answered: Shu Company located in Arkansas had…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

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 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

During the year, Plum Company has a SUTA tax rate of 4.8%. The taxable payroll for the year for FUTA and SUTA is $123,600. Compute:

Round your answers to the nearest cent.

a. Net FUTA tax	$fill in the blank 1
b. Net SUTA tax	fill in the blank 2
c. Total unemployment taxes	$fill in the blank 3

16. PR.05.02A.EXCEL.ALGO

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