During the quarter, employee wages exempt from FUTA or SUTA hinges on 15 weeks of service. Employee 1 received wages computed as 15 weeks × $900 totaling $13,500, with exemptions totaling $6,500 after deducting the $7,000 threshold. Employee 2 accrued wages of 15 weeks × $1,200 amounting to $18,000, thus $11,000 exempt. With total payments of $13,500 and $18,000 across both employees, computations yield a collective taxable wage of $14,000 by deducting exemptions from gross wages. Consequently, SUTA and FUTA taxes at the end of the first and second quarters result in SUTA at 0.057 multiplied by $14,000 equating to $798 and FUTA at 0.008 multiplied by $14,000 amounts to $112.
The primary option should be selected for procurement given its lower EAC. The breakdown is as follows: Option 1 costs $70,000 with a useful life of 6 years, whereas Option 2 costs $102,000 and lasts for 9 years.
Response:
The answer follows below.
Clarification:
Concept of Economic Unit
2014 2015
Jannison Inc. 308000 364000
Techron Co. 98000 126000
Subtotal 406000 490000
Subtract: Amortization 11000 11000
Net Income Total 395000 479000
Non-Controlling Interest
= 10 % of Techron Co,
(after accounting for amortization costs)
= 10% (98000-11000) 8700
= 10% (126000-11000) 11500
Total Consolidated Income 386300 467500
(post Noncontrolling interest distribution)
According to the Economic Unit concept, both companies are viewed as a single entity, thus their incomes are aggregated to determine the overall business income
