Final answer:
The question concerns the calculation of SUTA tax for Pancakes and Waffles, Incorporated, based on a 4.20% tax rate and a $17,000 wage base in Colorado. We need to apply the SUTA tax rate to the wages paid, considering the wage base limit for each employee to determine the company's tax liability.
Step-by-step explanation:
The question relates to the calculation of SUTA tax, which is a state unemployment tax that employers must pay. In Colorado, the SUTA tax rate is 4.20% and the wage base is $17,000. This means that an employer is responsible for paying the SUTA tax on the first $17,000 of each employee's wages. To calculate the total SUTA tax that Pancakes and Waffles, Incorporated owes for the year, you would multiply the amount of wages up to the wage base for each employee by the SUTA tax rate of 4.20%.
Assuming that all wages paid are subject to the wage base limit, the calculation would be straightforward. However, if any employee earned over $17,000, only the first $17,000 of their wages would be subject to the tax. If all wages were under the wage base, then the company would simply multiply the total wages paid by the SUTA rate. Based on the provided information that the company paid $584,100 in wages, we do not have individual employee wage details to determine the precise tax liability, therefore we would use the total wage paid to find an approximate liability.