Ned Fromton, an employer, files his employment tax return 20 days after the due date of the return. The amount of tax that was unpaid is $6,000. Fromton's penalty is: Failure to file (5% × $6,000) = $300 Note: Any fraction of a month counts as a whole month. Example 3-8 Yeld Company failed to pay its employment taxes of $5,000 for March 20-- (due April 15) until May 20. The failure to pay penalty assessed against Yeld Company is: Failure to Pay Tax ($5,000 × 0.5% × 2) = $50.00 Interest on Taxes Due ($5,000 × 0.06 × 35/365) = 28.77 Total Penalty = $78.77 Note: In addition, a penalty for failure to make a timely deposit will also be assessed. Vulcan Company is a monthly depositor whose tax liability for March 20-- is $2,090. 1. What is the due date for the deposit of these taxes? 2. Assume that no deposit was made until April 29 (14 days late). Compute the following penalties. Assume a 365-day year in your computations. Round your answers to the nearest cent. a. Penalty for failure to make timely deposit. $ b. Penalty for failure to fully pay tax. $ c. Interest on taxes due and unpaid (assume a 6% interest rate). $ d. Total penalty imposed. $
Ned Fromton, an employer, files his employment tax return 20 days after the due date of the return. The amount of tax that was unpaid is $6,000. Fromton's penalty is: Failure to file (5% × $6,000) = $300 Note: Any fraction of a month counts as a whole month. Example 3-8 Yeld Company failed to pay its employment taxes of $5,000 for March 20-- (due April 15) until May 20. The failure to pay penalty assessed against Yeld Company is: Failure to Pay Tax ($5,000 × 0.5% × 2) = $50.00 Interest on Taxes Due ($5,000 × 0.06 × 35/365) = 28.77 Total Penalty = $78.77 Note: In addition, a penalty for failure to make a timely deposit will also be assessed. Vulcan Company is a monthly depositor whose tax liability for March 20-- is $2,090. 1. What is the due date for the deposit of these taxes? 2. Assume that no deposit was made until April 29 (14 days late). Compute the following penalties. Assume a 365-day year in your computations. Round your answers to the nearest cent. a. Penalty for failure to make timely deposit. $ b. Penalty for failure to fully pay tax. $ c. Interest on taxes due and unpaid (assume a 6% interest rate). $ d. Total penalty imposed. $
College Accounting (Book Only): A Career Approach
13th Edition
ISBN:9781337280570
Author:Scott, Cathy J.
Publisher:Scott, Cathy J.
Chapter7: Employee Earnings And Deductions
Section: Chapter Questions
Problem 5PA
Related questions
Question
100%
| Ned Fromton, an employer, files his employment tax return 20 days after the due date of the return. The amount of tax that was unpaid is $6,000. Fromton's penalty is: | |
| Failure to file (5% × $6,000) = $300 Note: Any fraction of a month counts as a whole month. |
Example 3-8
Yeld Company failed to pay its employment taxes of $5,000 for March 20-- (due April 15) until May 20. The failure to pay penalty assessed against Yeld Company is:
| Failure to Pay Tax ($5,000 × 0.5% × 2) | = | $50.00 | |
| Interest on Taxes Due ($5,000 × 0.06 × 35/365) | = | 28.77 | |
| Total Penalty | = | $78.77 |
Note: In addition, a penalty for failure to make a timely deposit will also be assessed.
Vulcan Company is a monthly depositor whose tax liability for March 20-- is $2,090.
1. What is the due date for the deposit of these taxes?
2. Assume that no deposit was made until April 29 (14 days late). Compute the following penalties. Assume a 365-day year in your computations. Round your answers to the nearest cent.
| a. | Penalty for failure to make timely deposit. | $ |
| b. | Penalty for failure to fully pay tax. | $ |
| c. | Interest on taxes due and unpaid (assume a 6% interest rate). | $ |
| d. | Total penalty imposed. | $ |
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
This is a popular solution!
Trending now
This is a popular solution!
Step by step
Solved in 2 steps with 2 images
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Recommended textbooks for you
College Accounting (Book Only): A Career Approach
Accounting
ISBN:
9781337280570
Author:
Scott, Cathy J.
Publisher:
South-Western College Pub
College Accounting (Book Only): A Career Approach
Accounting
ISBN:
9781305084087
Author:
Cathy J. Scott
Publisher:
Cengage Learning
College Accounting (Book Only): A Career Approach
Accounting
ISBN:
9781337280570
Author:
Scott, Cathy J.
Publisher:
South-Western College Pub
College Accounting (Book Only): A Career Approach
Accounting
ISBN:
9781305084087
Author:
Cathy J. Scott
Publisher:
Cengage Learning
Excel Applications for Accounting Principles
Accounting
ISBN:
9781111581565
Author:
Gaylord N. Smith
Publisher:
Cengage Learning
College Accounting, Chapters 1-27
Accounting
ISBN:
9781337794756
Author:
HEINTZ, James A.
Publisher:
Cengage Learning,