Daniel has accepted a new job and is reviewing the retirement plan information. He has a choice of participating in the company's conventional Sec. 401(k) plan or a Roth 401(k) plan. Explain the difference between the two plans in terms of employee contributions and retirement distributions from the plan.
What will be an ideal response?
Under the conventional Sec. 401(k) plan, Daniel's contributions will be a salary reduction so he will pay less taxes in the year of contribution. The investment income earned in his account will be tax-deferred. When he retires and receives distributions, the full distribution will be taxable. Under a Roth 401(k), Daniel will contribute after-tax dollars (i.e., no salary reduction) so he will pay higher taxes in the years he is contributing. When he retires, his distribution will be tax-free, including the portion of the distribution attributable to the investment income. With the conventional Sec. 401(k) plan, the tax savings are frontloaded; with the Roth 401(k), the tax savings are backloaded.
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Camp Corporation purchased 8,000 shares of Tent Corporation common stock for $80 per share on January 1, 2014. Tent reported net income of $220,000 for 2014 and paid dividends of $90,000 during 2014. As of December 31, 2014, the market value of Tent Corporation common stock was $80 per share. Assuming the shares owned by Camp represent 30 percent of the total outstanding stock of Tent, the entry
to record the recognition of income by Camp Corporation is: A) Cash 66,000 Dividend Income 66,000 B) Investment in Tent Corporation 220,000 Income, Tent Corporation Investment 220,000 C) Investment in Tent Corporation 66,000 Income, Tent Corporation Investment 66,000 D) Investment in Camp Corporation 66,000 Cash 66,000
The relevant range of operations includes extremely high and low levels of production that are unlikely to occur.
Answer the following statement true (T) or false (F)
In an employment agreement with Carl, Arnold promises to work for Carl for the rest of his life. This promise must be in writing or in proper electronic form to be enforceable
a. True b. False Indicate whether the statement is true or false
This Gantt chart can be used to show:
A) activity D must come before activity C. B) activity F can be done at the same time as D. C) activity E can begin as soon as activity A is complete. D) activities D and B can be done simultaneously.