week 5 reporting paper FINAL

week 5 reporting paper FINAL - Reporting paper Jeena Cao...

Info icon This preview shows pages 1–2. Sign up to view the full content.

View Full Document Right Arrow Icon
Reporting paper Jeena Cao ACC/541 Sonja Wilson November 22, 2010 MEMO To: CEO From: Controller Re: Acquired Segments Most employees dedicate a small portion of their paycheck to some sort of pension plan offers through their company to save up an income for after retirement. The two common types of pension plan are defined contribution plans and defined benefit plans. A defined contribution plan is a plan where the employer also adds a certain amount into the employees’ pension trust each paying period and the amount is calculated using a formula. The formula includes variables such as the employer’s profit, employee’s length of employment, their age, and their compensation level (Kieso & Weygandt). This pension trust goes to the employee in full once he reached retirement as well as the investment returns. Employers favor the defined contribution plan for a few reasons; the employers’ contribution amount is known and fixed, employees are the those responsible for the risk factors, and the employers usually receives tax deduction for the amount contributed. On top of that, the accounting for contribution plan is very straightforward for the employer. The recording happens as the fund is being contributed, and there is no need for recording when the company pays out the pension trust to a retired employee because the fund has already been accounted for.
Image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full Document Right Arrow Icon
Image of page 2
This is the end of the preview. Sign up to access the rest of the document.

{[ snackBarMessage ]}

What students are saying

  • Left Quote Icon

    As a current student on this bumpy collegiate pathway, I stumbled upon Course Hero, where I can find study resources for nearly all my courses, get online help from tutors 24/7, and even share my old projects, papers, and lecture notes with other students.

    Student Picture

    Kiran Temple University Fox School of Business ‘17, Course Hero Intern

  • Left Quote Icon

    I cannot even describe how much Course Hero helped me this summer. It’s truly become something I can always rely on and help me. In the end, I was not only able to survive summer classes, but I was able to thrive thanks to Course Hero.

    Student Picture

    Dana University of Pennsylvania ‘17, Course Hero Intern

  • Left Quote Icon

    The ability to access any university’s resources through Course Hero proved invaluable in my case. I was behind on Tulane coursework and actually used UCLA’s materials to help me move forward and get everything together on time.

    Student Picture

    Jill Tulane University ‘16, Course Hero Intern