Chapter 5 eBook Print Item ? Sutcliffe Company had taxable wages totaling $87,500. During the year, the company paid some of its state contributions after the January 31 cutoff of the following year. The penalty for tardiness shown in the following calculation of the firm's net FUTA tax: Amount of gross FUTA tax ($87,500 x 6.0%) $5,250.00 State taxable wages $87,500 Sutcliffe's SUTA tax rate x 5.4% $ 4,725 Sutcliffe's SUTA tax Breakdown of Sutcliffe's SUTA tax payments: Before 1/31 cutoff-$3,000 x 100% credit (3,000.00) After 1/31 cutoff-$1,725 x 90% credit (1,552.50) Amount of net FUTA tax $ 697.50 If the company had made timely payments of its state contributions, the amount of its net FUTA tax would have been reduced to $525, for a savings of $172.50, as follows: $5,250.00 $87,500 Amount of gross FUTA tax ($87,500 x 6.0%) Total taxable wages Credit against tax Total credit x 5.4% 4,725.00 Amount of net FUTA tax ($87,500 x 0.6%) $ 525.00 $697.50 - $525.00 - $172.50 savings Example 5-6 $2,520 Park Company has a $70,000 federal and state taxable payroll and has earned a reduced state tax rate of 4 percent. If none of its state tax payments are timely, the FUTA tax calculation is as follows: Gross FUTA tax ($70,000 x 0.060) $4,200 Less 90% credit for state taxes paid late ($70,000 x 0.04 x 90%) Less additional credit for state tax if rate were 5.4% ($70,000 (0.054 - 0.04)] 980 Total credit 3,500 Net FUTA tax $ 700 If Park Company had made its SUTA payments before the due date of Form 940, the credit for the payments (4%) and the additional credit (1.4%) would have provided a total credit of $3,780 and a FUTA tax savings of $280. Peroni Company naid wanes of $170.900 this vear of this amount $114.000 was taxable for net FUITA and SUTA DE CAS. The state's contribution tax rate is 3.1% for Peroni Company. Due to cash flow problems the company did not make any SLITA navments until after the Form 940 filine date. Compute the following: Check My Work Previous Next Assignment Score: 50.99% All work saved. Email Instructor Save and Exit Submit Assignment for Grading Print Item Chapter 5 eBook After 1/31 cutoff-$1,725 90% credit (1,552.50) ? Amount of net FUTA tax $ 697.50 If the company had made timely payments of its state contributions, the amount of its net FUTA tax would have been reduced to $525, for a savings of $172.50, as follows: $5,250.00 Amount of gross FUTA tax ($87,500 x 6.0%) Total taxable wages $87,500 Credit against tax x 5.4% Total credit 4,725.00 Amount of net FUTA tax ($87,500 x 0.6%) $ 525.00 $697.50 - $525.00 - $172.50 savings Example 5-6 Park Company has a $70,000 federal and state taxable payroll and has earned a reduced state tax rate of 4 percent. If none of its state tax payments are timely, the FUTA tax calculation is as follows: Gross FUTA tax ($70,000 x 0.060) $4,200 $2,520 Less 90% credit for state taxes paid late ($70,000 0.04 x 90%) Less additional credit for state tax if rate were 5.4% ($70,000 (0.054 - 0,04)] 980 Total credit 3,500 Net FUTA tax $ 700 If Park Company had made its SUTA payments before the due date of Form 940, the credit for the payments (4%) and the additional credit (1.4%) would have provided a total credit of $3,780 and a FUTA tax savings of $280. Peroni Company paid wages of $170,900 this year. Of this amount, $114,000 was taxable for net FUTA and SUTA purposes. The state's contribution tax rate is 3.1% for Peroni Company. Due to cash flow problems, the company did not make any SUTA payments until after the Form 940 filing date. Compute the following: round your answers to the nearest cent. a. Amount of credit the company would receive against the FUTA tax for its SUTA contributions b. Amount that Peroni Company would pay to the federal government for its FUTA tax C. Amount that the company lost because of its late payments Check My Work Previous Next Assignment Score: 50.99% All work saved. Email Instructor Save and Exit Submit Assignment for Grading Chapter 5 eBook Print Item ? Sutcliffe Company had taxable wages totaling $87,500. During the year, the company paid some of its state contributions after the January 31 cutoff of the following year. The penalty for tardiness shown in the following calculation of the firm's net FUTA tax: Amount of gross FUTA tax ($87,500 x 6.0%) $5,250.00 State taxable wages $87,500 Sutcliffe's SUTA tax rate x 5.4% $ 4,725 Sutcliffe's SUTA tax Breakdown of Sutcliffe's SUTA tax payments: Before 1/31 cutoff-$3,000 x 100% credit (3,000.00) After 1/31 cutoff-$1,725 x 90% credit (1,552.50) Amount of net FUTA tax $ 697.50 If the company had made timely payments of its state contributions, the amount of its net FUTA tax would have been reduced to $525, for a savings of $172.50, as follows: $5,250.00 $87,500 Amount of gross FUTA tax ($87,500 x 6.0%) Total taxable wages Credit against tax Total credit x 5.4% 4,725.00 Amount of net FUTA tax ($87,500 x 0.6%) $ 525.00 $697.50 - $525.00 - $172.50 savings Example 5-6 $2,520 Park Company has a $70,000 federal and state taxable payroll and has earned a reduced state tax rate of 4 percent. If none of its state tax payments are timely, the FUTA tax calculation is as follows: Gross FUTA tax ($70,000 x 0.060) $4,200 Less 90% credit for state taxes paid late ($70,000 x 0.04 x 90%) Less additional credit for state tax if rate were 5.4% ($70,000 (0.054 - 0.04)] 980 Total credit 3,500 Net FUTA tax $ 700 If Park Company had made its SUTA payments before the due date of Form 940, the credit for the payments (4%) and the additional credit (1.4%) would have provided a total credit of $3,780 and a FUTA tax savings of $280. Peroni Company naid wanes of $170.900 this vear of this amount $114.000 was taxable for net FUITA and SUTA DE CAS. The state's contribution tax rate is 3.1% for Peroni Company. Due to cash flow problems the company did not make any SLITA navments until after the Form 940 filine date. Compute the following: Check My Work Previous Next Assignment Score: 50.99% All work saved. Email Instructor Save and Exit Submit Assignment for Grading Print Item Chapter 5 eBook After 1/31 cutoff-$1,725 90% credit (1,552.50) ? Amount of net FUTA tax $ 697.50 If the company had made timely payments of its state contributions, the amount of its net FUTA tax would have been reduced to $525, for a savings of $172.50, as follows: $5,250.00 Amount of gross FUTA tax ($87,500 x 6.0%) Total taxable wages $87,500 Credit against tax x 5.4% Total credit 4,725.00 Amount of net FUTA tax ($87,500 x 0.6%) $ 525.00 $697.50 - $525.00 - $172.50 savings Example 5-6 Park Company has a $70,000 federal and state taxable payroll and has earned a reduced state tax rate of 4 percent. If none of its state tax payments are timely, the FUTA tax calculation is as follows: Gross FUTA tax ($70,000 x 0.060) $4,200 $2,520 Less 90% credit for state taxes paid late ($70,000 0.04 x 90%) Less additional credit for state tax if rate were 5.4% ($70,000 (0.054 - 0,04)] 980 Total credit 3,500 Net FUTA tax $ 700 If Park Company had made its SUTA payments before the due date of Form 940, the credit for the payments (4%) and the additional credit (1.4%) would have provided a total credit of $3,780 and a FUTA tax savings of $280. Peroni Company paid wages of $170,900 this year. Of this amount, $114,000 was taxable for net FUTA and SUTA purposes. The state's contribution tax rate is 3.1% for Peroni Company. Due to cash flow problems, the company did not make any SUTA payments until after the Form 940 filing date. Compute the following: round your answers to the nearest cent. a. Amount of credit the company would receive against the FUTA tax for its SUTA contributions b. Amount that Peroni Company would pay to the federal government for its FUTA tax C. Amount that the company lost because of its late payments Check My Work Previous Next Assignment Score: 50.99% All work saved. Email Instructor Save and Exit Submit Assignment for Grading