PSc 5-2 Determine the Taxable Earnings Subject to FUTA Tax For each of the descr
ID: 2794895 • Letter: P
Question
PSc 5-2 Determine the Taxable Earnings Subject to FUTA Tax
For each of the described pay periods, determine the taxable earnings subject to FUTA tax.
NOTE: For simplicity, all calculations throughout this exercise, both intermediate and final, should be rounded to two decimal places at each calculation.
1:A business employs four individuals, whose taxable earnings to date (prior to the current pay period) are $5,900, $8,275, $3,500, and $1,600. During the current pay period, these employees earn $1,500, $2,640, $1,252, and $1,900, respectively.
Taxable earnings subject to FUTA tax = $
2:A business employs three individuals, whose taxable earnings to date (prior to the current pay period) are $4,200, $5,960, and $8,400. During the current pay period, these employees earn $1,500, $1,350, and $1,000, respectively.
Taxable earnings subject to FUTA tax = $
3:A business employs three individuals, whose taxable earnings to date (prior to the current pay period) are $28,500, $7,600, and $6,650. During the current pay period, these employees earn $3,520, $1,950, and $2,950, respectively.
Taxable earnings subject to FUTA tax = $
Explanation / Answer
A
FUTA tax rate is 0.6% and applied to the first $7000 paid as wages. When excess wages (5) is positive, then the taxable earnings = Current Pay (3) - Wages in Excess (5). When wages in excess are negative, then the taxable earnings = Current Pay
B
C
1 Names A B C D 2 Earnings prior to current pay period $5900 $8275 $3500 $1600 3 Earnings during current pay period $1500 $2640 $1252 $1900 4 Total Earnings (2+3) $7400 $10915 $4752 $3500 5 Federal Wage Base $7000 $7000 $7000 $7000 6 Wages in excess of $7000 (4-5) $400 $3915 -$2250 -$3500 7 Earnings subject to FUTA (@0.6%) $5400 $4360 $1252 $1900 8 FUTA Tax (@0.6% of 5) $32.4 $26.16 $7.51 $11.4Related Questions
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