Suppose the average Social Security benefits in the nation are $12,000 per year. The number of social security pension recipients is currently 50 million. There are 150 million workers in the workforce this year and the average taxable wage per worker is $25,000 per year.
Suppose the number of Social Security recipients increase to 100 million in 20 years, while the number of workers decreases to 100 million. Assuming nothing else changes, calculate the tax rate on wages necessary to pay Social Security benefits in 20 years on a pay-as-you-go basis.
Show the calculations used to determine the tax rate in the previous problem.
In: Economics
On January 8, the end of the first weekly pay period of the
year, Regis Company's employees earned $25,760 of office salaries
and $60,840 of sales salaries. Withholdings from the employees'
salaries include FICA Social Security taxes at the rate of 6.2%,
FICA Medicare taxes at the rate of 1.45%, $13,060 of federal income
taxes, $1,350 of medical insurance deductions, and $860 of union
dues. No employee earned more than $7,000 in this first
period.
Required:
1.1 Calculate below the amounts for each of these
four taxes of Regis Company. Regis’s state unemployment tax rate is
5.4% of the first $7,000 paid to each employee. The federal
unemployment tax rate is 0.6%.
1.2 Prepare the journal entry to record Regis
Company's January 8 employee payroll expenses and
liabilities.
2. Prepare the journal entry to record Regis’s
employer payroll taxes resulting from the January 8 payroll.
Regis’s state unemployment tax rate is 5.4% of the first $7,000
paid to each employee. The federal unemployment tax rate is
0.6%.
In: Accounting
1. A company had the following purchases during its first year of operations:
| Purchases | |
| January: | 11 units at $121 |
| February: | 21 units at $131 |
| May: | 16 units at $141 |
| September: | 13 units at $151 |
| November: | 11 units at $161 |
On December 31, there were 31 units remaining in ending inventory.
These 31 units consisted of 3 from January, 5 from February, 7 from
May, 5 from September, and 11 from November. Using the specific
identification method, what is the cost of the ending
inventory?
2. During the first week of January, an employee works 44 hours. For this company, workers earn 150% of their regular rate for hours in excess of 40 per week. Her pay rate is $14 per hour, and her wages are subject to no deductions other than FICA Social Security, FICA Medicare, and federal income taxes. The tax rate for Social Security is 6.2% of the first $118,500 earned each calendar year and the FICA tax rate for Medicare is 1.45% of all earnings. The current FUTA tax rate is 0.6%, and the SUTA tax rate is 5.4%. Both unemployment taxes are applied to the first $7,000 of an employee’s pay. The employee has $93 in federal income taxes withheld. What is the amount of this employee’s net pay for the first week of January?
3. Ryan Company deposits all cash receipts on the day they are received and makes all cash payments by check. Ryan's June bank statement shows $30,361 on deposit in the bank. Ryan's comparison of the bank statement to its cash account revealed the following:
| Deposit in transit | 3,850 |
| Outstanding checks | 1,485 |
Additionally, a $57 check written and recorded by the company
correctly was recorded by the bank as a $75 deduction.
The adjusted cash balance per the bank records should be:
4. An employee earns $5,950 per month working for an employer. The FICA tax rate for Social Security is 6.2% of the first $118,500 earned each calendar year and the FICA tax rate for Medicare is 1.45% of all earnings. The current FUTA tax rate is 0.6%, and the SUTA tax rate is 5.4%. Both unemployment taxes are applied to the first $7,000 of an employee's pay. The employee has $200 in federal income taxes withheld. The employee has voluntary deductions for health insurance of $168 and contributes $84 to a retirement plan each month. What is the amount of net pay for the employee for the month of January? (Round your intermediate calculations to two decimal places.)
In: Accounting
Tailor Johnson, a U.S. maker of fine menswear, has a subsidiary in Ethiopia. This year, the subsidiary reported and repatriated earnings before interest and taxes (EBIT) of 140 million Ethiopian birrs. The current exchange rate is 9.6046 birrs/dollar or S=$0.1041/birr.
The Ethiopian tax rate on this activity is 21%. U.S. tax law requires Tailor Johnson to pay taxes on the Ethiopian earnings at the same rate as on profits earned in the United States, which is currently 39%.
However, the United States gives a full tax credit for foreign taxes paid up to the amount of the U.S. tax liability. What is Tailor Johnson's U.S. tax liability on its Ethiopiansubsidiary?
Tailor Johnson's U.S. tax liability on its Ethiopian subsidiary is $___million. (Round to two decimal places.)
In: Finance
Peroni Company paid wages of $160,100 this year. Of this amount, $114,700 was taxable for net FUTA and SUTA purposes. The state's contribution tax rate is 3.1% for Peroni Company. Due to cash flow problems, the company did not make any SUTA payments until after the Form 940 filing date. Compute the following; round your answers to the nearest cent.
a. Amount of credit the company would receive
against the FUTA tax for its SUTA contributions
$________
b. Amount that Peroni Company would pay to the
federal government for its FUTA tax
$_________
c. Amount that the company lost because of its
late payments
$__________
In: Accounting
A.
|
A fixed asset is classified as 5-year MACRS property and has an initial cost of $41,000 What is the aftertax cash flow from the sale of this asset if the pre-tax salvage value at the end of year 3 is $17,500 and the tax rate is 34 percent? |
| Year |
Five-Year Property Class |
|
| 1 | 20.00 | % |
| 2 | 32.00 | |
| 3 | 19.20 | |
| 4 | 11.52 | |
| 5 | 11.52 | |
| 6 | 5.76 | |
$15,439.38
$15,558.04
$15,564.72
$15,463.06
B.
|
A firm has sales for the year of $95,500, costs of $48,500, and taxes of $19,000. What is the operating cash flow for the year? |
$21,000
Answer cannot be determined from the information provided.
$28,000
$32,000
In: Finance
You are looking at a one-year loan of $16,000. The interest rate is quoted as 7.8 percent plus three points. A point on a loan is 1 percent (one percentage point) of the loan amount. Quotes similar to this one are very common with home mortgages. The interest rate quotation in this example requires the borrower to pay three points to the lender up front and repay the loan later with 7.8 percent interest. a. What rate would you actually be paying here? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) b. What is the EAR for a one-year loan with a quoted interest rate of 10.8 percent plus two points? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.)
In: Finance
Each of the following situations describes a firm’s production and costs during a given year. a. Firm A is producing 20 000 units of output, incurring a total cost of $1,000,000 and total variable cost of $600,000. What is Firm A’s average fixed cost? b. Firm B is producing 20,000 units of output, incurring a total cost of $100,000 and total fixed cost of $20,000. What is Firm B’s average variable cost? c. Firm C is producing 750 units of output. Average variable cost is $10 per unit and average fixed cost is $5 per unit. What is Firm C’s total cost? d. Firm D is producing 400 units of output. Average total cost is $12 and average fixed cost is $4. What is Firm D’s total variable cost? e. Firm E is producing 1,250,000 units of output, incurring a total cost of $20,000,000 and total variable cost of $18,000,000. What is Firm E’s average fixed cost?
In: Economics
The following data are available for Sellco for the fiscal year ended on January 31, 2017:
| Sales | 850 | units | |||
| Beginning inventory | 230 | units | @ | $ | 3 |
| Purchases, in chronological order | 330 | units | @ | $ | 5 |
| 420 | units | @ | $ | 7 | |
| 190 | units | @ | $ | 8 |
Required:
a. Calculate cost of goods sold and ending inventory under the cost flow assumptions, FIFO, LIFO and Weighted average (using a periodic inventory system): (Round unit cost to 2 decimal places.)
|
b. Assume that net income using the
weighted-average cost flow assumption is $13,200. Calculate net
income under FIFO and LIFO. (Round unit cost to 2 decimal
places.)
|
In: Accounting
In year 1, Peter and Shaline Johnsen moved into a home in a new sub division. Theirs was one of the first homes in the subdivision. In year 1, they paid $3,500 in real property taxes to the local government, $1,350 to the developer of the subdivision for an assessment to pay for the sidewalks, and $850 for real property taxes on land they hold as an investment. What amount of property taxes are the Johnsens allowed to deduct assuming their itemized deductions exceed the standard deduction amount before considering any property tax deductions?
In: Accounting