Ursula, an employee of Ficus Corporation, is 35 years old and plans to retire in 20 years. The corporation has a qualified retirement plan and contributes $2,000 during 2020 for Ursula. In 2020, how should Ursula treat the $2,000 contribution made on her behalf by the corporation? a.Ursula must include only $100 (1/20 of the $2,000 contribution) in her gross income for 2020, but the same amount must be included in gross income for the following 19 years. b.The $2,000 and any earnings thereon must be included in Ursula's 2020 gross income. c.Ursula is not required to include either the $2,000 contribution or the earnings thereon in her 2020 gross income. d.Only the earnings on the $2,000 contribution must be included in Ursula's 2020 gross income. e.None of these choices are correct.
Ursula, an employee of Ficus Corporation, is 35 years old and plans to retire in 20 years. The corporation has a qualified retirement plan and contributes $2,000 during 2020 for Ursula. In 2020, how should Ursula treat the $2,000 contribution made on her behalf by the corporation? a.Ursula must include only $100 (1/20 of the $2,000 contribution) in her gross income for 2020, but the same amount must be included in gross income for the following 19 years. b.The $2,000 and any earnings thereon must be included in Ursula's 2020 gross income. c.Ursula is not required to include either the $2,000 contribution or the earnings thereon in her 2020 gross income. d.Only the earnings on the $2,000 contribution must be included in Ursula's 2020 gross income. e.None of these choices are correct.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Ursula, an employee of Ficus Corporation, is 35 years old and plans to retire in 20 years. The corporation has a qualified retirement plan and contributes $2,000 during 2020 for Ursula. In 2020, how should Ursula treat the $2,000 contribution made on her behalf by the corporation?
a.Ursula must include only $100 (1/20 of the $2,000 contribution) in her gross income for 2020, but the same amount must be included in gross income for the following 19 years.
b.The $2,000 and any earnings thereon must be included in Ursula's 2020 gross income.
c.Ursula is not required to include either the $2,000 contribution or the earnings thereon in her 2020 gross income.
d.Only the earnings on the $2,000 contribution must be included in Ursula's 2020 gross income.
e.None of these choices are correct.
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