Amanda company had a negative balance

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As of June 30, 2012 (the computation date for the 2013 tax rate), Amanda Company had a negative balance of $1,015 in its unemployment reserve account in State A.

The company's average payroll over the last three 12 month periods amounted to $525,000. The unemployment compensation law of State A provides that the tax rate of an employer who has a negative balance on the computation date shall be 7.2% during the following calendar year.Using the tax rate schedule presented in Problem 5-12B, compute:

a. The smallest voluntary contribution that Amanda Company should make in order to effect a change in its tax rate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $

b. The amount of the tax savings as a result of the voluntary contribution if Amanda Company's taxable payroll for 2013 is$650,000. . . . . . . . . . . . . . . . . . . . . . . $.:. 

Reference no: EM13913740

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