Bubbles LLC is a web design company that operates out of Boulder, Colorado. Mark and Jeff started Bubbles twenty years ago and it has grown to be one of the more sizeable web development firms in Colorado. Bubbles offers a 401(k)/profit sharing plan. The plan has the following characteristics:

• Eligibility: age 21 and one-year of service

• Match: dollar for dollar match

• Vesting: 20% per year (years 1 through 9)

• Highly compensated definition: uses top 20% election

• Profit-sharing contribution: Bubbles generally makes a sizeable contribution, but the percentage varies.

• The plan permits rollovers from other qualified plans and IRA

EE#	Employee	Ownership	Age	Tenure	Salary	Deferral
1	Mark	60%	48	20 Years	$200,000	$10,000
2	Jeff	30%	49	20 Years	$150,000	$15,000
3	Chad	6%	33	15 Years	$75,000	$5,250
4	Josh	4%	42	10 Years	$85,000	$5,100
5	Alex	0%	58	8 Years	$60,000	$0
6	Shay	0%	29	6 Years	$75,000	$4,500
7	Lisa	0%	53	4 Years	$50,000	$0
8	Alison	0%	19	2 Years	$60,000	$0
9	Chung	0%	25	8 Months	$24,000	$0
10	Chau	0%	19	6 Months	$18,000	$0

NOTE: Shay is Jeff's daughter. She graduated from the art institute five years ago.

A. Who is not eligible for the 401(k) plan?

B. Who is highly compensated?

C. What is the most that Bubbles could contribute to the profit-sharing plan for the current year assuming the salary deferrals stay constant?

D. What is the actual deferral percentage for the highly compensated employees?

E. What is the actual deferral percentage for the non-highly compensated employees

F. Does the plan pass the ADP test? Why or why not and what can the company do if the plan does not pass the test

G. Assume the company decided to make a profit-sharing contribution that was integrated with Social Security, with an integration level equal to the Social Security wage base. If the base percentage was 10% with a maximum excess percentage, how much would be contributed to the plan on behalf of Mark (disregard the salary deferral)?

H. How many years of service does Alison currently have for purposes of vesting?

PLEASE SHOW ALL WORK, NO EXCEL, THANK YOU!