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eslie participates in IBO's nonqualified deferred compensation plan. For 2023, she is deferring 10 percent of her $300,00

eslie participates in IBO's nonqualified deferred compensation plan. For 2023, she is deferring 10 percent of her $300,00

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Leslie participates in IBO's nonqualified deferred compensation plan. For 2023, she is deferring 10 percent of her $300,000 annual salary. Based on her deemed investment choice, Leslie expects to earn a 7 percent before-tax rate of return on her deferred compensation, which she plans to receive in 10 years. Leslie's marginal tax rate in 2023 is 32 percent. IBO's marginal tax rate is 21 percent (ignore payroll taxes in your analysis). (Use Table 1.)

Note: Do not round intermediate calculations. Round your final answer to the nearest whole dollar amount.

 

a. Assuming Leslie's marginal tax rate in 10 years (when she receives the distribution) is 33 percent, what is Leslie's after-tax accumulation on the deferred compensation?

 

Future Value of $1 n 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 25 1.0% 2.0% 3.0% 1.01000 1.02000 1.03000 1.02010 1.04040 1.06090 1.03030 1.06121 1.09273 1.04060 1.08243 1.12551 3.75% 1.03750 1.07641 1.11677 1.15865 1.05101 1.10408 1.15927 1.06152 1.12616 1.19405 1.07214 1.08286 1.09369 1.10462 1.11567 1.12683 1.14869 1.17166 1.19509 1.21899 1.24337 1.22987 1.26677 1.30477 1.34392 1.20210 1.24718 1.29395 1.34247 1.39281 1.44504 1.49923 1.38423 1.42576 1.55545 1.26824 1.29361 1.46853 1.61378 1.51259 1.67430 1.31948 1.34587 1.37279 1.55797 1.13809 1.14947 1.16097 1.17258 1.18430 1.19615 1.73709 1.80223 1.60471 1.65285 1.40024 1.42825 1.45681 1.70243 1.86981 1.93993 2.01268 2.08815 1.20811 1.75351 1.22019 1.48595 1.80611 1.28243 1.64061 2.09378 2.51017 4.0% 1.04000 1.08160 4.25% 1.04250 1.08681 1.13300 1.12486 1.16986 1.18115 1.21665 1.23135 1.26532 1.31593 1.36857 1.42331 1.48024 1.53945 1.28368 1.33824 1.39511 1.45440 1.51621 1.58065 1.64783 1.60103 1.80094 1.87298 1.94790 1.66507 1.71786 1.73168 1.79087 1.97993 2.07893 2.18287 2.29202 2.40662 2.52695 2.65330 1.86699 1.94633 2.02582 2.10685 2.19112 2.66584 3.38635 2.02905 2.11529 2.20519 2.29891 2.83075 5.0% 6.0% 1.05000 1.06000 1.10250 1.12360 1.15763 1.19102 1.21551 1.26248 1.27628 1.33823 1.34010 1.41852 1.40710 1.50363 1.47746 1.59385 1.55133 1.68948 1.62889 1.79085 1.71034 1.89830 1.79586 2.01220 1.88565 2.13293 2.26090 2.39656 2.54035 2.69277 2.85434 3.02560 3.20714 4.29187 7.0% 1.07000 1.14490 1.22504 1.31080 1.40255 1.50073 1.60578 1.71819 1.83846 1.96715 2.10485 2.25219 2.40985 2.57853 2.75903 2.95216 3.15882 3.37993 3.61653 3.86968 5.42743 8.0% 9.0% 1.08000 1.09000 1.16640 1.18810 1.25971 1.29503 1.36049 1.41158 1.46933 1.53862 1.58687 1.67710 1.71382 1.82804 1.85093 1.99256 1.99900 2.17189 2.15892 2.36736 2.33164 2.58043 2.51817 2.81266 2.71962 3.06580 2.93719 3.34173 3.17217 3.64248 3.42594 3.70002 3.99602 4.31570 5.14166 4.66096 5.60441 6.84848 8.62308 10.0% 11.0% 1.10000 1.11000 1.21000 1.23210 1.33100 1.36763 1.46410 1.51807 1.61051 1.68506 1.77156 1.87041 1.94872 2.07616 2.14359 2.30454 2.35795 2.55804 2.59374 2.83942 2.85312 3.15176 3.13843 3.49845 3.45227 3.88328 3.79750 4.31044 4.17725 3.97031 4.59497 4.32763 5.05447 4.71712 5.55992 6.11591 6.72750 10.83471 12.0% 1.12000 1.25440 1.40493 1.57352 1.76234 1.97382 2.21068 2.47596 2.77308 3.10585 3.47855 3.89598 4.36349 4.88711 4.78459 5.47357 5.31089 6.13039 5.89509 6.86604 6.54355 7.68997 7.26334 8.61276 8.06231 13.58546 17.00006 13.0% 1.13000 1.27690 1.44290 1.63047 1.84244 2.08195 2.35261 2.65844 3.00404 3.39457 3.83586 4.33452 4.89801 5.53475 6.25427 7.06733 7.98608 9.02427 10.19742 9.64629 11.52309 21.23054 14.0% 1.14000 1.29960 1.48154 1.68896 1.92541 2.19497 2.50227 2.85259 3.25195 3.70722 4.22623 4.81790 5.49241 6.26135 7.13794 8.13725 9.27646 10.57517 12.05569 13.74349 26.46192
Transcribed Image Text:Future Value of $1 n 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 25 1.0% 2.0% 3.0% 1.01000 1.02000 1.03000 1.02010 1.04040 1.06090 1.03030 1.06121 1.09273 1.04060 1.08243 1.12551 3.75% 1.03750 1.07641 1.11677 1.15865 1.05101 1.10408 1.15927 1.06152 1.12616 1.19405 1.07214 1.08286 1.09369 1.10462 1.11567 1.12683 1.14869 1.17166 1.19509 1.21899 1.24337 1.22987 1.26677 1.30477 1.34392 1.20210 1.24718 1.29395 1.34247 1.39281 1.44504 1.49923 1.38423 1.42576 1.55545 1.26824 1.29361 1.46853 1.61378 1.51259 1.67430 1.31948 1.34587 1.37279 1.55797 1.13809 1.14947 1.16097 1.17258 1.18430 1.19615 1.73709 1.80223 1.60471 1.65285 1.40024 1.42825 1.45681 1.70243 1.86981 1.93993 2.01268 2.08815 1.20811 1.75351 1.22019 1.48595 1.80611 1.28243 1.64061 2.09378 2.51017 4.0% 1.04000 1.08160 4.25% 1.04250 1.08681 1.13300 1.12486 1.16986 1.18115 1.21665 1.23135 1.26532 1.31593 1.36857 1.42331 1.48024 1.53945 1.28368 1.33824 1.39511 1.45440 1.51621 1.58065 1.64783 1.60103 1.80094 1.87298 1.94790 1.66507 1.71786 1.73168 1.79087 1.97993 2.07893 2.18287 2.29202 2.40662 2.52695 2.65330 1.86699 1.94633 2.02582 2.10685 2.19112 2.66584 3.38635 2.02905 2.11529 2.20519 2.29891 2.83075 5.0% 6.0% 1.05000 1.06000 1.10250 1.12360 1.15763 1.19102 1.21551 1.26248 1.27628 1.33823 1.34010 1.41852 1.40710 1.50363 1.47746 1.59385 1.55133 1.68948 1.62889 1.79085 1.71034 1.89830 1.79586 2.01220 1.88565 2.13293 2.26090 2.39656 2.54035 2.69277 2.85434 3.02560 3.20714 4.29187 7.0% 1.07000 1.14490 1.22504 1.31080 1.40255 1.50073 1.60578 1.71819 1.83846 1.96715 2.10485 2.25219 2.40985 2.57853 2.75903 2.95216 3.15882 3.37993 3.61653 3.86968 5.42743 8.0% 9.0% 1.08000 1.09000 1.16640 1.18810 1.25971 1.29503 1.36049 1.41158 1.46933 1.53862 1.58687 1.67710 1.71382 1.82804 1.85093 1.99256 1.99900 2.17189 2.15892 2.36736 2.33164 2.58043 2.51817 2.81266 2.71962 3.06580 2.93719 3.34173 3.17217 3.64248 3.42594 3.70002 3.99602 4.31570 5.14166 4.66096 5.60441 6.84848 8.62308 10.0% 11.0% 1.10000 1.11000 1.21000 1.23210 1.33100 1.36763 1.46410 1.51807 1.61051 1.68506 1.77156 1.87041 1.94872 2.07616 2.14359 2.30454 2.35795 2.55804 2.59374 2.83942 2.85312 3.15176 3.13843 3.49845 3.45227 3.88328 3.79750 4.31044 4.17725 3.97031 4.59497 4.32763 5.05447 4.71712 5.55992 6.11591 6.72750 10.83471 12.0% 1.12000 1.25440 1.40493 1.57352 1.76234 1.97382 2.21068 2.47596 2.77308 3.10585 3.47855 3.89598 4.36349 4.88711 4.78459 5.47357 5.31089 6.13039 5.89509 6.86604 6.54355 7.68997 7.26334 8.61276 8.06231 13.58546 17.00006 13.0% 1.13000 1.27690 1.44290 1.63047 1.84244 2.08195 2.35261 2.65844 3.00404 3.39457 3.83586 4.33452 4.89801 5.53475 6.25427 7.06733 7.98608 9.02427 10.19742 9.64629 11.52309 21.23054 14.0% 1.14000 1.29960 1.48154 1.68896 1.92541 2.19497 2.50227 2.85259 3.25195 3.70722 4.22623 4.81790 5.49241 6.26135 7.13794 8.13725 9.27646 10.57517 12.05569 13.74349 26.46192
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