Example 5-6 Park Company has a $70,000 federal and state taxable payroll and has earned a reduced state tax rate timely, the FUTA tax calculation is as follows: Gross FUTA tax ($70,000 x 0.060) Less 90% credit for state taxes paid late ($70,000 x 0.04 × 90%) $2,520 Less additional credit for state tax if rate were 5.4% [$70,000 x (0.054 - 0.04)] 980 Total credit Net FUTA tax If Park Company had made its SUTA payments before the due date of Form 940, the credit for the pay 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 nd SUTA purposes. The state's contribution tax rate is 3.1% for Peroni Company. Due to cash flow roblems, 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. ■. Amount of credit the company would receive against the FUTA tax for its SUTA contributions . Amount that Peroni Company would pay to the federal government for its FUTA tax - Amount that the company lost because of its late payments
Example 5-6 Park Company has a $70,000 federal and state taxable payroll and has earned a reduced state tax rate timely, the FUTA tax calculation is as follows: Gross FUTA tax ($70,000 x 0.060) Less 90% credit for state taxes paid late ($70,000 x 0.04 × 90%) $2,520 Less additional credit for state tax if rate were 5.4% [$70,000 x (0.054 - 0.04)] 980 Total credit Net FUTA tax If Park Company had made its SUTA payments before the due date of Form 940, the credit for the pay 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 nd SUTA purposes. The state's contribution tax rate is 3.1% for Peroni Company. Due to cash flow roblems, 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. ■. Amount of credit the company would receive against the FUTA tax for its SUTA contributions . Amount that Peroni Company would pay to the federal government for its FUTA tax - Amount that the company lost because of its late payments
Chapter14: Taxes On The Financial Statements
Section: Chapter Questions
Problem 4BCRQ
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