Pension Plans. The DiMario Corporation adopted a pension plan for its employees on January 1, 19E. A

Pension Plans. The DiMario Corporation adopted a pension plan for its employees on January 1, 19E. A trial balance of the records of the plan at De- cember 31, 19F, follows:

Cash . Investments (at cost) . Bone, Equity . Cohan, Equity . Dohler, Equity . Income from Investments – Received in I 9F .

Debit Credit

$ 400

3,400

$1,590

1,060

850

300

$3,800

The following data pertain to the corporation's employees for 19F:

Date

Employed

Date

Terminated

Salary Paid

ill19F

Bone

.

Dec.

8,I9A

$17,900

Cohan

.

Feb.

I, I9C

14,100

Dohler

.

Dec.

8, I9C

April 9,I9F

3,500

Kolman

.

Sept.

15, 190

8,000

Jones

.

Sept.

21, I9F

Dec. 22,I9F

3,000

Lohman

.

May

6, 19F

5,500

Total. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $52,000

The provisions of the plan include the following:

(a) The corporation shall contribute 10% of its net income before deducting income taxes and the contribution, but not in excess of 15% of the total salaries paid to the participants in the plan who are in the employ of the corporation at year end. The employees make no contributions to the plan.

(b) An employee shall be eligible to participate in the plan on January I following the completion of one full year of employment.

(c) The corporation's contribution shall be allocated to the participants' equities on the following point system:

(I) For each full year of employment – 2 points.

(2) For each $ 100 of salary paid in the current year – 1 point.

(d) A participant shall have a vested interest of 10% of his total equity for each full year of employment. Forfeitures shall be distributed to the remaining participants in proportion to their equities in the plan at the beginning of the year. Terminated employees shall receive their vested interests at year end.

(e) Income from the plan's investments' shall be allocated to the equities of the remaining participants in proportion to their equities at the beginning of the year.

The DiMario Corporation's net income in 19F before income taxes and con- tribution to the plan was $73,250.

Required: (1) A schedule computing the corporation's contribution to the plan for 19F.

(2) A schedule computing the vested interests of the participants termi- nating their employment during 19F.

(3) A schedule showing the allocation of the corporation's 19F contribution to each participant.

(4) A schedule showing the allocation of the plan's 19F income on invest- ments and forfeitures by terminated participants.

(AI CPA adapted)

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