Need help immediately. Please take a look! In the following problem, use the net

Question

Need help immediately. Please take a look!

In the following problem, use the net FUTA tax rate of 0.6 Percentage on the first dollar 7,000 of taxable wages. Refer to Instruction 5-1. Sparks Company's SUTA rate for next year is 3.25 Percentage because its reserve ratio falls into the state's 10 Percentage to less than 12 Percentage category [(contributions - benefits paid) deviated average payroll = dollar 414,867 -dollar 3,521,790 = 11.78 Percentage]. If the next bracket (12 Percentage to less than 14 Percentage) would give the company a lower tax rate of 3.05 Percentage, what would be the least amount of the voluntary contribution needed to qualify the company for the 3.05 Percentage SUTA tax rate? Round your answer to two decimal places. dollar

Explanation / Answer

Remark : The question asked here is about the Federal Tax Laws, but the same has put under "Accounting " category, so I will try to resolve the same with calculations only, not with the related tax laws.

To mark an ratio between 12% to 14%, Sparks Company needs an average contribution as follows :-

Let (Contribution-benefits paid) as x

nnd Average payroll as ststic,

so, the equation is as follows :-

x / 3521790 = 0.12

x = 3521790*0.12

= 422614.8

or

x/3521790 = 0.14

x = 493050.60

So, from above the contribution -benefit lies between 422614.80 to 493050.60

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