Problem

1. Complete Form 940, the Employer’s Annual Federal Unemployment Tax Return. Assume that a...

1. Complete Form 940, the Employer’s Annual Federal Unemployment Tax Return. Assume that all wages have been paid and that all quarterly payments have been submitted to the state as required. The payroll information for 2013 appears below. The required federal tax deposit forms and checks were submitted as follows: a deposit of $206.90 on April 21, a deposit of $198.72 on July 22, and a deposit of $240 on October 21. Date the unemployment tax return January 28, 2014. A check for the balance due as per line 14, Part 4, will be sent with Form 940.

2. In general journal form, record issuance of a check on January 28, 2014, for the balance of FUTA tax due for 2013. Use journal page 15.

Analyze: What total debits were made to liability accounts for entries you recorded in Problem 11.4A and Problem 11.5A?

Problem 11.4A

Certain transactions and procedures relating to federal and state unemployment taxes follow for Fashion Sense, a retail store owned by Nancy Roberts. The firm’s address is 2007 Trendsetter Lane, Dallas, TX 75268-0967. The firm’s phone number is 972-456-1200.The employer’s federal and state identification numbers are 75-9462315 and 37-9462315, respectively. Carry out the procedures as instructed in each of the following steps.

INSTRUCTIONS

1. Compute the state unemployment insurance tax owed on the employees’ wages for the quarter ended March 31, 2013. This information will be shown on the employer’s quarterly report to the state agency that collects SUTA tax. The employer has recorded the tax on each payroll date. Although the state charges a 5.4 percent unemployment tax rate, Fashion Sense’s rate is only 1.7 percent because of its experience rating. The employee earnings for the first quarter are shown below. All earnings are subject to SUTA tax.
2. On April 30, 2013, the firm issued a check to the state employment commission for the amount computed above. In general journal form, record the issuance of the check. Use journal page 82.