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During 2019, Jeff Smallwood worked for two different employers. Until May, he worked for Rowland Construction Company in Ames, Iowa, and earned $22,000. The state unemployment rate for Rowland is 4.6%. He then changed jobs and worked for Ford Improvement Company in Topeka, Kansas, and earned $29,500 for the rest of the year. The state unemployment rate for Ford is 5.1%. Determine the unemployment taxes (FUTA and SUTA) that would be paid by each company.

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Answer:

A. $1,054.00

B. $ 450.00

Explanation:

Calculation to Determine the unemployment taxes (FUTA and SUTA) that would be paid by each company.

Calculation for Rowland Construction Company unemployment taxes for (FUTA and SUTA)

FUTA tax $7,000 × 0.006

FUTA tax = $42.00

SUTA tax $22,000 × 0.046

SUTA tax = $1,012.00

Hence,

Unemployment taxes=FUTA tax+SUTA tax

Let plug in the formula

Unemployment taxes=$42.00+$1,012.00

Unemployment taxes= $1,054.00

Therefore Rowland Construction Company unemployment taxes for (FUTA and SUTA) will be $1,054.00

b.

Calculation for Ford Improvement Company unemployment taxes for (FUTA and SUTA)

FUTA tax $7,000 × 0.006

FUTA tax = $ 42.00

SUTA tax $8,000 × 0.051

SUTA tax = 408.00

Hence,

Unemployment taxes=FUTA tax+SUTA tax

Let plug in the formula

Unemployment taxes=$42.00+$408.00

Unemployment taxes= $450.00

Therefore Rowland Construction Company unemployment taxes for (FUTA and SUTA) will be $450.00

Take note that FUTA tax amount for both is $7,000 while the tax rate 0.006

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