To start a business of his own, Mr. dela Rea opted for an early retirement from Plaridel Retrofitting Corporation, a private company, after ten (10) years of service. Pursuant to the company’s qualified and approved private retirement benefit plan, he was paid his retirement benefit. * Plaridel should withhold income taxes from dela Rea’s retirement pay. dela Rea’s retirement pay is excluded from gross income. Plaridel should pay the tax on dela Rea’s retirement pay. Since dela Rea voluntarily retired, the retirement pay he received is not retirement in the true sense but is part of his compensation income subject to tax.
To start a business of his own, Mr. dela Rea opted for an early retirement from Plaridel Retrofitting Corporation, a private company, after ten (10) years of service. Pursuant to the company’s qualified and approved private retirement benefit plan, he was paid his retirement benefit. * Plaridel should withhold income taxes from dela Rea’s retirement pay. dela Rea’s retirement pay is excluded from gross income. Plaridel should pay the tax on dela Rea’s retirement pay. Since dela Rea voluntarily retired, the retirement pay he received is not retirement in the true sense but is part of his compensation income subject to tax.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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To start a business of his own, Mr. dela Rea opted for an early retirement from Plaridel Retrofitting Corporation, a private company, after ten (10) years of service. Pursuant to the company’s qualified and approved private retirement benefit plan, he was paid his retirement benefit. *
Plaridel should withhold income taxes from dela Rea’s retirement pay.
dela Rea’s retirement pay is excluded from gross income.
Plaridel should pay the tax on dela Rea’s retirement pay.
Since dela Rea voluntarily retired, the retirement pay he received is not retirement in the true sense but is part of his compensation income subject to tax.
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