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The partnership of Keenan and Kludlow paid the following wages during this year: M. Keenan (partner) $112,000 S. Kludlow...

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Accounting

The partnership of Keenan and Kludlow paid the following wagesduring this year:

M. Keenan (partner)$112,000
S. Kludlow (partner)99,500
N. Perry (supervisor)52,500
T. Lee (factory worker)37,300
R. Rolf (factory worker)28,300
D. Broch (factory worker)6,200
S. Ruiz (bookkeeper)26,600
C. Rudolph (maintenance)5,300

In addition, the partnership owed $200 to Rudolph for work heperformed during December. However, payment for this work will notbe made until January of the following year. The state unemploymenttax rate for the company is 2.95% on the first $9,000 of eachemployee's earnings. Compute the following:

Round your answers to the nearest cent.

a. Net FUTA tax for the partnership for thisyear
$

b. SUTA tax for this year
$

Answer & Explanation Solved by verified expert
3.9 Ratings (506 Votes)

a Calculation of FUTA Tax Payable:
Particulars Amount Amount
Gross Wages 3,67,700
Less Salary to partner keenan 1,12,000
Less Salary to partner Kludlow 99,500
Less Salaries above 7000 limit
Perry (52,500 -7,000) 45500
Lee (37,300 - 7,000) 30300
Rolf (28,300 - 7,000) 21300
Ruiz (26,600 - 7,000) 19600 3,28,200
Taxable Wages (1) 39,500
FUTA Tax Rate @ 0.6%     (2) 0.60%
FUTA Tax Payable = (3) = (1) * (2) $237
b Calculation of SUTA Tax Payable
Particulars Amount Amount
Gross Wages 3,67,700
Less Salary to partner keenan 1,12,000
Less Salary to partner Kludlow 99,500
Less Salaries above 9000 limit
Perry ($52,500 -$9,000) 43500
Lee ($37,300 - $9,000) 28300
Rolf ($28,300 - $9,000) 19300
Ruiz ($26,600 - $9,000) 17600 3,20,200
Taxable Wages (1) 47,500
FUTA Tax Rate @ 2.95%     (2) 2.95%
FUTA Tax Payable = (3) = (1) * (2) $1401.25

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