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Kai is the president of Zebra Antiques. An employee, Reese Francis, is due a raise. Reese's current benefit analysis is as follows: Company Cost Employee Cost (Current) (Current) $ 6,500.00 150.00 336.00 168.00 67.20 33.60 840.00 Yearly Benefit Costs Medical insurance Dental insurance Life insurance AD&D Short-term disability Long-term disability 401(k) Social Security Medicare Tuition reimbursement Total yearly benefit costs (employer) Employee's annual salary The total value of employee's compensation 3,402.25 795.69 2,300.00 $ 14,592.74 56,000.00 $ 70,592.74 $ 975.00 150.00 0 0 0 0 1,680.00 3,402.25 795.69 0

Kai is the president of Zebra Antiques. An employee, Reese Francis, is due a raise. Reese's current benefit analysis is as follows: Company Cost Employee Cost (Current) (Current) $ 6,500.00 150.00 336.00 168.00 67.20 33.60 840.00 Yearly Benefit Costs Medical insurance Dental insurance Life insurance AD&D Short-term disability Long-term disability 401(k) Social Security Medicare Tuition reimbursement Total yearly benefit costs (employer) Employee's annual salary The total value of employee's compensation 3,402.25 795.69 2,300.00 $ 14,592.74 56,000.00 $ 70,592.74 $ 975.00 150.00 0 0 0 0 1,680.00 3,402.25 795.69 0

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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### Benefit Analysis for Reese Francis at Zebra Antiques **Current Benefit Analysis:** | Yearly Benefit Costs | Company Cost (Current) | Employee Cost (Current) | |---------------------------------|------------------------|-------------------------| | Medical insurance | $6,500.00 | $975.00 | | Dental insurance | $150.00 | $150.00 | | Life insurance | $336.00 | 0 | | AD&D | $168.00 | 0 | | Short-term disability | $67.20 | 0 | | Long-term disability | $33.60 | 0 | | 401(k) | $840.00 | $1,680.00 | | Social Security | $3,402.25 | $3,402.25 | | Medicare | $795.69 | $795.69 | | Tuition reimbursement | $2,300.00 | 0 | | **Total yearly benefit costs (employer)** | **$14,592.74** | | | **Employee's annual salary** | **$56,000.00** | | | **Total value of employee’s compensation** | **$70,592.74** | | #### Requirements: Compute the new benefit analysis assuming: - A 3 percent increase in pay. - An increase in 401(k) contributions to 8 percent with a company match of 50 percent up to a 3 percent contribution by the employer. - A 15 percent increase in medical and dental insurance premiums. **Note:** Round your answers to 2 decimal places. **Updated Analysis:** | Yearly Benefit Costs | Company Cost (New) | Employee Cost (New) | |---------------------------------|--------------------|---------------------| | Medical insurance | $7,260.00 | $1,089.00 | | Dental insurance | $170.00 | $170.50 | | Life insurance | $252.00 | 0 | | AD&D | $126.00 | 0 | | Short-term disability | $50.40 | 0 | | Long-term disability | $25.20 | 0 | | 401(k) |
Transcribed Image Text:### Benefit Analysis for Reese Francis at Zebra Antiques **Current Benefit Analysis:** | Yearly Benefit Costs | Company Cost (Current) | Employee Cost (Current) | |---------------------------------|------------------------|-------------------------| | Medical insurance | $6,500.00 | $975.00 | | Dental insurance | $150.00 | $150.00 | | Life insurance | $336.00 | 0 | | AD&D | $168.00 | 0 | | Short-term disability | $67.20 | 0 | | Long-term disability | $33.60 | 0 | | 401(k) | $840.00 | $1,680.00 | | Social Security | $3,402.25 | $3,402.25 | | Medicare | $795.69 | $795.69 | | Tuition reimbursement | $2,300.00 | 0 | | **Total yearly benefit costs (employer)** | **$14,592.74** | | | **Employee's annual salary** | **$56,000.00** | | | **Total value of employee’s compensation** | **$70,592.74** | | #### Requirements: Compute the new benefit analysis assuming: - A 3 percent increase in pay. - An increase in 401(k) contributions to 8 percent with a company match of 50 percent up to a 3 percent contribution by the employer. - A 15 percent increase in medical and dental insurance premiums. **Note:** Round your answers to 2 decimal places. **Updated Analysis:** | Yearly Benefit Costs | Company Cost (New) | Employee Cost (New) | |---------------------------------|--------------------|---------------------| | Medical insurance | $7,260.00 | $1,089.00 | | Dental insurance | $170.00 | $170.50 | | Life insurance | $252.00 | 0 | | AD&D | $126.00 | 0 | | Short-term disability | $50.40 | 0 | | Long-term disability | $25.20 | 0 | | 401(k) |
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