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What are the adr for each employee

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Reference no: EM132480826

Accounting Question (401-K). For this question, we have to calculate the ADR first and then we have to determine if QNEC is needed for each person to satisfy the ADP test.

ABC Company

Employee           Compensation                    Employee Deferral ADR QNECs

Cindy                 $285,000                          $16,500

Ward                  $200,000                           $14,000

Kathy                  $100,000                            $5,000

Susan                 $90,000                             $2,700

Eric                    $75,000                               $750

Question 1. Who are the HCEs? Who are the NHCEs?

Question 2. What are the ADRs for each employee?

Question 3. What is the ADP for the HCEs? For the NHCEs?

Question 4. Does the plan pass the ADP test?

Question 5. If the plan does not satisfy the ADP test, how can you use QNECs to pass the ADP test?

Question 6. If the plan does not satisfy the ADP test, how can you use refunds or re-characterizations instead of QNECs to satisfy the ADP test?

Reference no: EM132480826

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