Problem 2

The following table contains qualified plan information for Yarbrough, Inc., as of 12/31/2015. Yarbrough, Inc., maintains a noncontributory qualified profit-sharing plan with 3-year cliff vesting.

Employee	Compensation	Ownership Interest	Years of Service*	Plan Account Balance*
A	$270,000	5%	2	$20,000
B	$180,000	8%	10	$300,000
C	$130,000	6%	8	$180,000
D	$60,000	1%	3	$27,000
E	$40,000	0%	2	$7,500
* As of 12/31/15

Please answer all of the following questions:

a. What is the total covered compensation for 2015?

b. What is the maximum profit-sharing contribution Yarbrough can make for 2015?

c. Which of the employees is highly compensated?

d. Is the plan top-heavy?

e. If employees D and E quit in January 2016, what are their respective vested balances in the plan?