32.Angelo's Bakery has 105 employees. 90 of the employees are nonexcludable and 15 of those are highly compensated (75 are nonhighly compensated). The company's qualified profit sharing plan benefits 8 of the highly compensated employees and 40 of the nonhighly compensated employees. Does the profit sharing plan sponsored by Angelo's Bakery meet the coverage test?

(a) Yes, the plan meets the average benefits percentagetest.

(b) Yes, the plan meets the general safe harbor test. (c) Yes, the plan meets the ratio percentage test.

(d) Yes, the plan meets ratio percentage est and the general safe harbor test.

33.Which of the following qualified plans would allocate a higher percentage of the plan's current contributions to a certain class or group of eligible employees?

1. A profit sharing plan that uses permitted disparity.

2. An age-based profit sharing plan.

3. A defined benefit pension plan.

4. A target benefit pension plan.

(a) 1 only.

(b) 1 and 3.

(c) 2 and 4.

(d) 1, 2, 3, and 4.

34. Carla would like to determine her financial needs during retirement. All of the following are costs she might eliminate in her retirement needs calculation except:

(a) The $175 per month of parking expenses for parking at her place of employment.

(b) The $1,500 mortgage payment she makes that is

scheduled to end 2 years into retirement. (c) The Medicare taxes she pays each year.

(d) The $2,000 per month she deposits into savings.

35. MH: sponsors a qualified profit sharing plan. Of their 205 employees, 200 are nonexcludable. Of the 200 nonexcludable employees, 160 are NHC and 40 are HC. The plan covers 110 of the NHC and 15 of the HC. The plan does not meet the coverage requirements because only 69% of the NHC are covered by the plan.

(a) True

(b) False

36. Going Higher Construction sponsors a 401(k) profit sharing plan. In the current year, Going Higher Construction contributed 25% of each employees' compensation to the profit sharing plan. The ADP of the 401(k) plan for the NHC was

3.5%. If Bob, age 57, earns $100,000 and is a 6% owner, what

is the maximum amount that he may defer into the 401(k) plan for this year?

(a) $3,500.

(b) $5,500.

(c) $11,000.

(d) $20,000.

37.Which of the following statements concerning the use of life insurance as an incidental benefit provided by a qualified retirement plan is (are) correct?

1. The premiums paid for the life insurance policy within

the qualified plan are taxable to the participant at the time of payment.

2. Under the 25 percent test, if term insurance or

universal life is involved, the aggregate premiums paid for the policy cannot exceed 25 percent of the employer's aggregate contributions to the participant's account. If a whole life policy other than universal life is used, however, the aggregate premiums paid for the whole life policy cannot exceed

50 percent of the employer's aggregate contributions to the participant's account. In either case, the entire value of the life insurance contract must be converted into cash or periodic income at or before retirement.

(a) 1 only.

(b) 2 only.

(c) Both 1 and 2.

(d) Neither 1 nor 2.

38.Bruno terminated employment with Philip's Bar and Grill {PBG) after completing five years of service. PBG sponsors a 401(k) profit sharing plan with a dollar for dollar match up to 6% of compensation in which Bruno had an account balance of

$50,000. Of that account balance, $20,000 was attributable to PBG noncontributory contributions and $30,000 was attributable to the combination of Bruno's deferral contributions and the equivalent employer match on those deferral contributions. At this time, considering Bruno has terminated employment and that PBG's 401{k) profit sharing plan is not top-heavy and follows the least generous graduated vesting schedule permitted under PPA 2006, what is Bruno's vested account balance in the 401(k) profit sharing plan?

(a) $43,000.

(b) $44,000.

(c) $46,000.

(d) $47,000.

39.If a term life insurance policy is purchased in a defined contribution plan, the aggregate cost of the term life insurance policy cannot exceed 10% of the value of the account.

(a) True

(b) False

40.Toni, an executive vice-president, terminates her employment with Kerry Oil and Gas after three years of service. Her account balance in the company profit sharing plan was

$21,000 at the time of termination. The plan follows the

least generous graduated vesting schedule permitted under PPA

2006, so Toni's vested benefit in the profit sharing plan is

$8,400.

(a) True

(b) False

mulitple choice

Thanks