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The following unemployment tax rate schedule is in effect for the calendar year 2021 in State A, which uses the reserve-ratio formula in determining employer contributions: Reserve Ratio Contribution Rate 0.0% or more, but less than 1.0% 1.0% or more, but less than 1.2% 1.2% or more, but less than 1.4% 1.4% or more, but less than 1.6% 1.6% or more, but less than 1.8% 1.8% or more, but less than 2.0% 2.0% or more, but less than 2.2% 2.2% or more, but less than 2.4% 2.4% or more, but less than 2.6% 2.6% or more, but less than 2.8% 2.8% or more, but less than 3.0% 3.0% or more, but less than 3.2% 3.2% or more 6.7% 6.4% 6.1% 5.8% 5.5% 5.2% 4.9% 4.6% 4.3% 4.0% 3.7% 3.4% 3.1% Hyram Company, which is located in State A, had an average annual payroll of $850,000 for the three 12-month peri- ods ending on June 30, 2020 (the computation date for the tax year 2021). As of June 30, 2020, the total contributions that had been made to Hyram Company's reserve account, in excess of the benefits charged, amounted to $17,440. Compute: a. Hyram Company's reserve ratio for 2020 b. 2021 contribution rate for the company c. Smallest contribution that the company can make in order to reduce its tax rate if State A permits voluntary contributions... d. Tax savings realized by the company, taking into consideration the voluntary contribution made in (c) if the taxable payroll in 2021 is $980,000. 70 70 2$

The following unemployment tax rate schedule is in effect for the calendar year 2021 in State A, which uses the reserve-ratio formula in determining employer contributions: Reserve Ratio Contribution Rate 0.0% or more, but less than 1.0% 1.0% or more, but less than 1.2% 1.2% or more, but less than 1.4% 1.4% or more, but less than 1.6% 1.6% or more, but less than 1.8% 1.8% or more, but less than 2.0% 2.0% or more, but less than 2.2% 2.2% or more, but less than 2.4% 2.4% or more, but less than 2.6% 2.6% or more, but less than 2.8% 2.8% or more, but less than 3.0% 3.0% or more, but less than 3.2% 3.2% or more 6.7% 6.4% 6.1% 5.8% 5.5% 5.2% 4.9% 4.6% 4.3% 4.0% 3.7% 3.4% 3.1% Hyram Company, which is located in State A, had an average annual payroll of $850,000 for the three 12-month peri- ods ending on June 30, 2020 (the computation date for the tax year 2021). As of June 30, 2020, the total contributions that had been made to Hyram Company's reserve account, in excess of the benefits charged, amounted to $17,440. Compute: a. Hyram Company's reserve ratio for 2020 b. 2021 contribution rate for the company c. Smallest contribution that the company can make in order to reduce its tax rate if State A permits voluntary contributions... d. Tax savings realized by the company, taking into consideration the voluntary contribution made in (c) if the taxable payroll in 2021 is $980,000. 70 70 2$

Corporate Financial Accounting
Corporate Financial Accounting
14th Edition
ISBN:9781305653535
Author:Carl Warren, James M. Reeve, Jonathan Duchac
Publisher:Carl Warren, James M. Reeve, Jonathan Duchac
Chapter10: Liabilities: Current, Installment Notes, And Contingencies
Section: Chapter Questions
Problem 10.8EX: Calculate payroll An employee earns 44 per hour and 1.5 times that rate for all hours in excess of...
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5-12A • LO 4 The following unemployment tax rate schedule is in effect for the calendar year 2021 in State A, which uses the reserve-ratio formula in determining employer contributions: See Example 5-10 on page 5-16 Reserve Ratio Contribution Rate 0.0% or more, but less than 1.0% . 1.0% or more, but less than 1.2% 1.2% or more, but less than 1.4% 1.4% or more, but less than 1.6% 1.6% or more, but less than 1.8% 1.8% or more, but less than 2.0% 2.0% or more, but less than 2.2% 2.2% or more, but less than 2.4% 2.4% or more, but less than 2.6% 2.6% or more, but less than 2.8% 2.8% or more, but less than 3.0% 3.0% or more, but less than 3.2% 3.2% or more 6.7% 6.4% 6.1% 5.8% 5.5% 5.2% 4.9% 4.6% 4.3% 4.0% 3.7% 3.4% 3.1% ....... Hyram Company, which is located in State A, had an average annual payroll of $850,000 for the thrce 12-month peri- ods ending on June 30, 2020 (the computation date for the tax year 2021). As of June 30, 2020, the total contributions that had been made to Hyram Company's reserve account, in excess of the benefits charged, amounted to $17,440. Compute: % a. Hyram Company's reserve ratio for 2020. b. 2021 contribution rate for the company. c. Smallest contribution that the company can make in order to reduce its tax rate if State A permits voluntary contributions.. d. Tax savings realized by the company, taking into consideration the voluntary contribution made in (c) if the taxable payroll in 2021 is $980,000. $ 2$
Transcribed Image Text:5-12A • LO 4 The following unemployment tax rate schedule is in effect for the calendar year 2021 in State A, which uses the reserve-ratio formula in determining employer contributions: See Example 5-10 on page 5-16 Reserve Ratio Contribution Rate 0.0% or more, but less than 1.0% . 1.0% or more, but less than 1.2% 1.2% or more, but less than 1.4% 1.4% or more, but less than 1.6% 1.6% or more, but less than 1.8% 1.8% or more, but less than 2.0% 2.0% or more, but less than 2.2% 2.2% or more, but less than 2.4% 2.4% or more, but less than 2.6% 2.6% or more, but less than 2.8% 2.8% or more, but less than 3.0% 3.0% or more, but less than 3.2% 3.2% or more 6.7% 6.4% 6.1% 5.8% 5.5% 5.2% 4.9% 4.6% 4.3% 4.0% 3.7% 3.4% 3.1% ....... Hyram Company, which is located in State A, had an average annual payroll of $850,000 for the thrce 12-month peri- ods ending on June 30, 2020 (the computation date for the tax year 2021). As of June 30, 2020, the total contributions that had been made to Hyram Company's reserve account, in excess of the benefits charged, amounted to $17,440. Compute: % a. Hyram Company's reserve ratio for 2020. b. 2021 contribution rate for the company. c. Smallest contribution that the company can make in order to reduce its tax rate if State A permits voluntary contributions.. d. Tax savings realized by the company, taking into consideration the voluntary contribution made in (c) if the taxable payroll in 2021 is $980,000. $ 2$
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