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In: Accounting

4. Acme Inc. has 200 total employees, 150 of which are nonexcludable employees. Ten employees are...

4. Acme Inc. has 200 total employees, 150 of which are nonexcludable employees. Ten employees are highly compensated. Seven of the 10 highly compensated and 100 of the 140 nonhighly compensated employees are covered under Acme’s qualified plan. The average accrued benefits for the highly compensated is 3% and the average accrued benefit for the nonhighly compensated is 1.5%. Which of the following statements is true regarding coverage?

1. The plan passes the ratio percentage test.

2. The plan passes the average benefits test.

1. 1 only.

2. 2 only.

3. Both 1 and 2.

4. Neither 1 nor 2.

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ekkarill92 answered 2 years ago
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