Purchase Solution

Computing Payroll Taxes

Not what you're looking for?

Ask Custom Question

1- Timmons Co., which has a taxable payroll of $500,000, is subject to FUTA tax of 6.2% and a state contribution rate of 5.4%. However, because of stable employment experience, the company's state rate has been reduced to 2%. What is the total amount of federal and state unemployment tax for Timmons Co.?
a. $58,500
b. $41,000
c. $20,000
d. $14,000
e. none of the above

2- The total payroll of Waters Company for the month of October, 2007 was $360,000, of which $90,000 represented amounts paid in excess of $90,000 to certain employees. $300,000 represented amounts paid to employees in excess of the $7,000 maximum subject to unemployment taxes. $90,000 of federal income taxes and $9,000 of union dues were withheld. The state unemployment tax is 1%, the federal unemployment tax is .8%, and the current F.I.C.A. tax is 7.65% on an employee's wages to $90,000 and 1.45% in excess of $90,000. What amount should Waters record as payroll tax expense?
a. $118,620.
b. $113,040.
c. $23,040.
d. $28,440.
e. none of the above

Purchase this Solution
Solution Summary

This solution describes the procedures for computing a company's federal unemployment and FICA, as well as its state unemployment, tax liabilities.

Solution Preview

1. Timmons total unemployment tax follows:

Federal: $500,000*.008=$ 4,000 (Because state payments are made, the 6.2% rate is credited 5.4%)
State: $500,000*.02 = ...

Purchase this Solution
Free BrainMass Quizzes
Basics of corporate finance

These questions will test you on your knowledge of finance.

Writing Business Plans

This quiz will test your understanding of how to write good business plans, the usual components of a good plan, purposes, terms, and writing style tips.

Business Ethics Awareness Strategy

This quiz is designed to assess your current ability for determining the characteristics of ethical behavior. It is essential that leaders, managers, and employees are able to distinguish between positive and negative ethical behavior. The quicker you assess a person's ethical tendency, the awareness empowers you to develop a strategy on how to interact with them.

Organizational Leadership Quiz

This quiz prepares a person to do well when it comes to studying organizational leadership in their studies.

Team Development Strategies

This quiz will assess your knowledge of team-building processes, learning styles, and leadership methods. Team development is essential to creating and maintaining high performing teams.

View More Free Quizzes
Related BrainMass Solutions

  • Computing Payroll Taxes Payable

    251050 Computing Payroll Taxes Payable Payroll for the pay period ended October 31, 2007 is summarized as follows: Federal Income Department Total Wages Withheld FICA Unemployment Factory

  • Computing and Journalizing Payroll Amounts

    The solution assists in computing and journalizing payroll amounts.

  • Horizontal and Vertical Analysis

    Complete the comparative income statement by computing dollar change ($ change) and percentage change (% change).

  • Mercy Inc. Ratios, Silver Manufacturing Cash Budget

    Interest on notes: Due a week before the end of the quarter = $1,245.00 Income Taxes: Due on February 25, 2009 = $4,500.00 Dividends for the year 2007: Dividends are paid to the Shareholders on January 01, 2009 = $15,250.00 Payroll: January = $32,750

  • Payroll system project

    Further, legal issues are making correct deductions for federal income taxes, social security taxes, state income taxes, local tax withholdings, insurance deductions, charitable contributions, and garnishments.

  • Payroll Account Analysis; Journalizing payroll transactions

    388891 Payroll Accounting Analyzing and Journalizing payroll transaction for Cal Ruther Cal Ruther, an employer, is subject to FICA taxes, but exempt from FUTA and SUTA taxes.

  • Payroll Taxes: Employees and Employers

    228956 Payroll Taxes: Employees and Employers What are the payroll taxes paid by employees? What are the payroll taxes paid by the employer?

  • Payroll Entries: Oates Company

    None of the employees has reached the earnings limits specified for federal or state employer payroll taxes.

  • The Effect of Taxes on Accounts and Financial Statements

    Calculate the employer's payroll taxes, using the following rates: state unemployment, 4.3%; federal unemployment, 0.8% B. Illustrate the effects on the accounts and financial statements of recording the accrual of payroll taxes.

View More Related Solutions