Homework Answers
The answer is option - 2
The employer receive a tax deduction for amounts contributed to the pension plan trust, and subsequent investment return do not generate tax for the employer.
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Which of the following statements is correct with respect to a defined contribution plan? Multiple Choice...
What is the difference between a defined benefit and a defined contribution retirement plan? Multiple Choice...
What is the difference between a defined benefit and a defined contribution retirement plan? Multiple Choice Defined benefit plans allow employees to set aside money on a tax-exempt basis. Defined contribution plans allow employees to determine a specific amount of money they wish to receive upon retirement. Defined contribution plans allow employees to contribute a set amount toward their retirement plan while employed. Defined benefit plans limit employee contributions while employed.
The accounting for defined contribution pension plans is easy because of each year: Multiple Choice A....
The accounting for defined contribution pension plans is easy because of each year: Multiple Choice A. The employer records pension expenses equal to the amount paid out to retirees. B. The employer records pension expense based on an amount provided by the actuary. C. The employer records pension expense equal to the annual contribution. D. The employer records pension expense based on the earnings of the plan assets.
Which of the following statements about defined contribution plans is incorrect? a. Defined benefit plans are...
Which of the following statements about defined contribution plans is incorrect? a. Defined benefit plans are used more often by large corporations than by small companies b. In a defined contribution plan, the employer must make larger-than-average contributions to the pension plan when investment returns have been below expectations. c. In general, employees can choose the investment vehicle under a defined contribution plan. Thus, highly risk-averse employees can choose low-risk investments, while more risk-tolerant employees can choose high-risk Investments d....
Recording Entries for Defined Contribution Plan Hewlatt Inc. sponsors a defined contribution plan for its employees....
Recording Entries for Defined Contribution Plan Hewlatt Inc. sponsors a defined contribution plan for its employees. In 2020, salaries eligible for a 3% payment toward defined contribution plans of employees are $880,000. Hewlatt funded 100% of its obligation to fund 3% toward contribution plans as of the end of the year. Hewlatt Inc. will also match contributions made by employees by the end of the year, up to 5% of salaries. Hewlatt estimates the obligation to match up to 5%...
The interest cost included in the annual pension cost recorded by an employer sponsoring a defined benefit pension plan...
The interest cost included in the annual pension cost recorded by an employer sponsoring a defined benefit pension plan represents the a) difference between the expected and actual return on plan assets. b) increase in the defined benefit obligation due to the passage of time. c) increase in the fair value of plan assets due to the passage of time. d) interest earned on the plan assets for the year. An experience gain or loss (adjustment) is a) additional...
4. Zofia works for Red Corporation, which has a contributory defined contribution pension plan. The employer's...
4. Zofia works for Red Corporation, which has a contributory defined contribution pension plan. The employer's monthly contribution to the plan is 4 percent of each participating mployee's monthly salary, while the employee also contributes 4 percent. Which of the following statements best describes the benefits of the plan? A) Red receives a deduction for its contributions to the plan when Zofia receives a distribution from the plan. B) While Zofia is taxed on the employer's contributions to the plan,...
Choose the correct answer- 1)Which of the following are deferred tax assets (select all that apply)?...
Choose the correct answer- 1)Which of the following are deferred tax assets (select all that apply)? A.Inventory reserves for obsolescence B. Accelerated depreciation methods for tax purposes C. Installment sales from real estate transaction D. Non-deductible accrued warranty loss provisions 2)Service costs will: A. Increase the PBO and increase the pension expense B.Increase pension expense and decrease accumulated other comprehensive income C.Increase the pension expense and reduce plan assets D.Increase the PBO and reduce plan assets 3)Calculating a PBO is...
Which of the following statements is correct with respect to Fiduciary Funds? Multiple Choice Fiduciary funds...
Which of the following statements is correct with respect to Fiduciary Funds? Multiple Choice Fiduciary funds include Pension trust funds, Internal service funds, Private-purpose trust funds, and Investment trust funds. O Custodial funds are fiduciary funds which are used when resources are held by a government in a trustee capacity but no trust agreement is in place. se by a gover Fiduciary funds use the current financial resources measurement focus and accrual accounting Fiduciary funds must be adjusted when preparing...
I need help plz Robert has six investment options for his defined contribution plan which include:...
I need help plz Robert has six investment options for his defined contribution plan which include: 1) money market fund; 2) Cdn bond fund; 3) Cdn balanced fund; 4) International balanced fund; 5) Cdn equity fund and 6) International equity fund. Where should he invest the funds for maximum growth? Assuming he gets 8% annual compound returns what is the expected future value of the pension at his age 65? (4 marks) ADDITIONAL INFORMATION: Age: Robert is currently 30 years...
1)Which of the following is an important difference between qualified and nonqualified retirement plans? a. Qualified...
1)Which of the following is an important difference between qualified and nonqualified retirement plans? a. Qualified plans provide benefits for retirees who were high-performing employees, while nonqualified plans provide benefits for retirees whose performance did not meet minimum job expectations. b. Employer contributions are deductible when paid to a qualified plan, but deductible when paid to the employee under a nonqualified plan. c. Employer contributions to nonqualified plans are subject to dollar limits, but contributions to qualified plans are unlimited. d. Earnings of...
Which of the following statements about defined contribution plans is incorrect? a. Defined benefit plans are used more often by large corporations than by small companies b. In a defined contribution plan, the employer must make larger-than-average contributions to the pension plan when investment returns have been below expectations. c. In general, employees can choose the investment vehicle under a defined contribution plan. Thus, highly risk-averse employees can choose low-risk investments, while more risk-tolerant employees can choose high-risk Investments d....
Recording Entries for Defined Contribution Plan Hewlatt Inc. sponsors a defined contribution plan for its employees. In 2020, salaries eligible for a 3% payment toward defined contribution plans of employees are $880,000. Hewlatt funded 100% of its obligation to fund 3% toward contribution plans as of the end of the year. Hewlatt Inc. will also match contributions made by employees by the end of the year, up to 5% of salaries. Hewlatt estimates the obligation to match up to 5%...
4. Zofia works for Red Corporation, which has a contributory defined contribution pension plan. The employer's monthly contribution to the plan is 4 percent of each participating mployee's monthly salary, while the employee also contributes 4 percent. Which of the following statements best describes the benefits of the plan? A) Red receives a deduction for its contributions to the plan when Zofia receives a distribution from the plan. B) While Zofia is taxed on the employer's contributions to the plan,...
Which of the following statements is correct with respect to Fiduciary Funds? Multiple Choice Fiduciary funds include Pension trust funds, Internal service funds, Private-purpose trust funds, and Investment trust funds. O Custodial funds are fiduciary funds which are used when resources are held by a government in a trustee capacity but no trust agreement is in place. se by a gover Fiduciary funds use the current financial resources measurement focus and accrual accounting Fiduciary funds must be adjusted when preparing...
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