An entity's retirement benefit plan provides for an annual contribution of P2,000,000 to a fund held and managed by a third party. The fund is legally separate from the entity and is to be used solely for the retirement pay of employees. The amount to be received by a retiring employee is dependent on the amount of contributions and the investment income earned on those contributions. The third party trustee assumes the obligation of disbursing the funds to retiring employees. The entity made the following contributions to the fund: 20x1 P 0 20x2 4,700,000 20x3 1,200,000 Requirements: Provide the entries to record the contributions.

An entity's retirement benefit plan provides for an annual contribution of P2,000,000 to a fund held and managed by a third party. The fund is legally separate from the entity and is to be used solely for the retirement pay of employees. The amount to be received by a retiring employee is dependent on the amount of contributions and the investment income earned on those contributions. The third party trustee assumes the obligation of disbursing the funds to retiring employees. The entity made the following contributions to the fund: 20x1 P 0 20x2 4,700,000 20x3 1,200,000 Requirements: Provide the entries to record the contributions.

CONCEPTS IN FED.TAX.,2020-W/ACCESS

20th Edition

ISBN:9780357110362

Author:Murphy

Publisher:Murphy

Chapter15: Choice Of Business Entity—other Considerations

Section: Chapter Questions

Problem 52P

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An entity's retirement benefit plan provides for an annual contribution of P2,000,000 to a fundheld and managed by a third party. The fund is legally separate from the entity and is to beused solely for the retirement pay of employees. The amount to be received by a retiringemployee is dependent on the amount of contributions and the investment income earned onthose contributions. The third party trustee assumes the obligation of disbursing the funds toretiring employees.
An entity contributes to an industrial pension plan that provides a pension arrangement for its employees. A large number of other employers also contribute to the pension plan, and the entity makes contributions in respect of each employee. These contributions are kept separate from corporate assets and are used together with any investment income to purchase annuities for retired employees. The only obligation of the entity is to pay the annual contributions. This pension scheme is a ___. Defined benefit plan only Multiemployer plan and a defined benefit scheme Defined contribution plan only Multiemployer plan and a defined contribution scheme
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