Client Background: WebCrafters Studio is a creative web design agency located in Denver, Colorado. Founded by Emma and Liam two decades ago, WebCrafters Studio has evolved into a prominent web development firm in the Colorado area. The company offers an innovative 401(k)/profit sharing plan with the following features: - Eligibility: Employees become eligible if they are 21 years of age and have completed one year of service. - Match: The company provides a dollar-for-dollar match on employee contributions. - Vesting: Vesting occurs at a rate of 20% per year, starting from the first year up to the ninth year. - Highly Compensated Definition: Uses top 20% election. - Profit-Sharing Contribution: WebCrafters Studio typically makes a substantial profitsharing contribution, although the exact percentage may vary. - Rollovers: The plan allows for rollovers from other qualified plans and IRAs. Note: Zoe is Liam's daughter. She graduated from the School of Design five years ago. Your Task: (Explain your answers in detail, providing support from the textbook or other relevant sources. Your answers should be formatted as a report you are preparing for your clients' financial planning team, so be professional and thorough.) 1. Who is not eligible for the 401(k) plan? 2. Who is highly compensated? 3. What is the most that WebCrafters Studio could contribute to the profit-sharing plan for the current year assuming the salary deferrals stay constant? 4. What is the actual deferral percentage for the highly compensated employees? 5. What is the actual deferral percentage for the non-highly compensated employees 6. 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