Identify the four major provisions of the Employee Retirement Income Security Act of 1974 (ERISA).
What will be an ideal response?
ANSWER:
The major provisions of ERISA are:
(1) Vesting must follow one of three alternative formulas—100 percent vested after 10 years of membership; graded vesting, in which benefits are 25 percent vested after 5 years, increasing 5 percent for the next 5 years, and increasing 10 percent per year thereafter; and the rule of 45, in which benefits of an employee with 5 or more years of membership must be 50 percent vested when the sum of age and year of membership are 45, with 10 percent additional vesting for each year of service (subject to the requirement that vesting be 50 percent after 10 years and 100 percent after 15 years).
(2) Annual funding must occur and be based on an acceptable actuarial funding method. Unfunded accumulated benefits must be funded over a maximum of 40 years (30 years for single employer plans established after 1973). Unfunded accumulated benefits due to actuarial losses must be funded over a maximum of fifteen years.
(3) Pension fund managers should be concerned with diversification of investments. However, the only specific requirement is to limit investments in the sponsoring company to 10 percent of the total pension fund.
(4) The Pension Benefit Guaranty Corporation (PBGC) was created as a national insurer of pension plans and empowered to collect premiums from plans to pay for guaranteed termination benefits.
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A tile manufacturer has supplied the following data: Boxes of tiles produced and sold 520,000Sales revenue$2,132,000Variable manufacturing expense$650,000Fixed manufacturing expense$464,000Variable selling and administrative expense$260,000Fixed selling and administrative expense$312,000Net operating income$446,000The company's contribution margin ratio is closest to:
A. 57.3% B. 45.8% C. 21.0% D. 42.7%
Pettit Company purchased heavy equipment by giving the seller a $30,000 cash down payment and a 5-year interest-bearing note for the $170,000 balance of the price. Compute Pettit's book basis and tax basis in the equipment.
A. Book basis $200,000; tax basis $30,000 B. Book and tax basis $200,000 C. Book and tax basis $30,000 D. Book basis $30,000; tax basis $170,000
Larsen Company began the current year with balances in accounts receivable and allowance for doubtful accounts of $45,700 and $1,280, respectively. The company reported credit sales of $475,250 during the year, collected $480,200, and wrote off $800 of uncollectible accounts. Larsen Company estimates that 12% of its accounts receivable balance will be uncollectible.Required:a) Determine the balance in the allowance for doubtful accounts as of the end of the current year.b) Compute Larsen Company's uncollectible accounts expense for the current year.c) Determine Larsen's net realizable value of accounts receivable as of the end of the current year.
What will be an ideal response?
In a unilateral contract, one party makes a promise that the other party can accept only by actually doing something
Indicate whether the statement is true or false