Michelle is a key employee participant in a top-heavy profit sharing plan which follows the least generous graduated vesting schedule permitted under PPA 2006. Each year of her five year employment with Silky Oaks Resort, she has received an employer contribution equal to $10,000 to her profit sharing plan account. Today the balance of her profit sharing plan is $65,000. If Michelle terminated employment with Silky Oaks Resort today what is the vested balance of her profit sharing plan

The vested balance of her profit sharing plan is $50,000

Explanation:

In order to calculate the vested balance of her profit sharing plan we would have to make the following calculation:

The Vested Balance of her profit sharing plan = Total amount received in the account

Therefore, Total amount received in the account = Contribution received per year*Number of years

Total amount received in the account = $10,000*5 years

Total amount received in the account = $50,000

The vested balance of her profit sharing plan is $50,000

The answer to this question is $50,000

Explanation:

Solution

From the given question we solve for the vested balance of her profit plan sharing.

Given that:

The Vested Balance of her profit sharing plan = Total amount received in the account

= Contribution received per year*Number of years

= $1000*5 years

= $50000

Therefore the vested balance of her profit sharing plan is 50,000