chapter 5 solutions

Topics: Taxation in the United States, Tax, Internal Revenue Service Pages: 4 (877 words) Published: November 2, 2014

CHAPTER 5
Solutions—Series A Problems
5–1A.(a)Net FUTA tax $123,400 × 0.006=$740.40
(b)Net SUTA tax$123,400 × 0.048=5,923.20
(c)Total unemployment taxes$6,663.60
5–2A.Earnings subject to FUTA and SUTA:
$737,910 – $472,120 = $265,790
(a)Net FUTA tax$265,790 × 0.006=$1,594.74
(b)Net SUTA tax$265,790 × 0.029=7,707.91
(c)Total unemployment taxes$9,302.65
5–3A.(a)Net FUTA tax$67,900 × 0.006=$407.40
(b)Net SUTA tax$83,900 × 0.037=$3,104.30
5–4A.(a)SUTA taxes paid to Massachusetts$18,000 × 0.04=$720.00 (b)SUTA taxes paid to New Hampshire$24,000 × 0.0265=$636.00 (c)SUTA taxes paid to Maine$79,000 × 0.029=$2,291.00
(d)FUTA taxes paid$103,500 × 0.006=$621.00
5–5A.(a)Yes. Donner Company meets the test of having paid wages totaling more than $1,500 during any calendar quarter of the current year. (b)Taxable wages$23,400 + $64,700=$88,100.00
Net FUTA tax$88,100 × 0.006=$528.60
5–6A.(a)FUTA taxable wages:
Total wages$177,610
Less: Director’s salary(900)
Less: Nontaxable portion of president’s and vice
president’s salaries [($20,000 – $7,000) + ($15,000 – $7,000)](21,000) Less: Pretax cafeteria plan contributions (2,000)
Taxable wages$153,710
Net FUTA tax: $153,710 × 0.006$922.26
(b)SUTA taxable wages:
Total wages$177,610
Less: Director’s salary(900)
Less: Nontaxable portion of president’s and vice
president’s salaries [($20,000 – $7,000) + ($15,000
– $7,000)](21,000)
Less: Pretax cafeteria plan contributions (2,000)
Taxable wages$153,710
SUTA tax: $153,710 × 0.035$5,379.85
5–7A.(a)$2,800 × 0.032 = $89.60
(b)($9,000 – $ 2,800) × 0.038 = $235.60
(c)($7,000 × 0.006) + [($7,000 – $2,800) × 0.006] = $67.20 5–8A.(a)FUTA tax$7,000 × 0.006=$42.00
SUTA tax$22,000 × 0.046= 1,012.00
Total= $1,054.00
(b)FUTA tax$7,000 × 0.006=$42.00
SUTA tax$8,000 × 0.051=408.00
Total=$ 450.00
5–9A. (a)Gross payroll$314,800
Less: Payroll to partners (nontaxable)(160,000)
Less: Salaries beyond $7,000 limit(114,800)
Taxable payroll$40,000
FUTA tax...
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