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##### Illnois Wholesale Company

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First Problem;Illinois Wholesale Company has an agreement with it sales manager entitling that individual to 7% of company earning as a bonus. Company income for the calendar year before bonus and income tax is \$350,000. Income tax is 30% of income after bonus.;1. Compute the amount of bonus is the bonus is calculated on income before deductions for bonus and income tax.;2. Compute the amount of bonus is calculated on income after deduction for bonus but before deduction for income tax.;Second Problem;Francisco Company has established a defined benefit pension plan for its lone employee, Derrald Ryan, Annual payments under the pension plan are equal to 3% of Derrald's highest lifetime salary multiplied by the number of years with the company. Derralds salary in 2014 was \$75,000. Derrald is expected to retire in 20 years, and his salary increase are expected to average 4% per year during that period. As of the beginning of 2015, Derrald has worked for Francisco Company for 12 years.;1. What is the amount of the annual pension payment that should be used in computing Francisco's accumulated benefit obligation (ABO) as of January 1, 2015?;2. What is the amount of the annual pension payment that should be used in computing Francisco's projected benefit obligation (PBO) as of January 1, 2015?;Third Problem;Pension plan information for Naperville WIndow Company is as follows;January 1, 2015 PBO.......................................................................... \$4,780,000;ABO........................................................................... \$3,950,000;During 2015 Pension benefits paid to retire employees................\$315,000;December 31, 2015 PBO........................................................................... \$ 5,425,000;ABO........................................................................... \$ 4,245,000;Obligation Discount rate...................................................................................... 10%;Assuming no change in actuarial assumptions, what is the pension service cost for 2015?

Paper#35243 | Written in 18-Jul-2015

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