The Holden Corporation maintains a SIMPLE-IRA retirement plan for its employees.The company has notified its employees that for 2016 it will fund the SIMPLE-IRA by matching an employee's contribution up to a maximum of 3% of the employee's salary.Harrison's salary in 2016 is $50,000 and he contributed $2,000 to the plan.What amount must Holden contribute on Harrison's behalf?
A)$-0-
B)$600
C)$1,500
D)$2,000
E)$4,600

Question

Quizplus · Accepted Answer

Holden will match up to 3% of Harrison's salary, which is $50,000 x 3% = $1,500. Since Harrison already contributed $2,000, Holden will only contribute up to the maximum match of $1,500. Therefore, the amount Holden must contribute on Harrison's behalf is $1,500. Choice (C) is the correct answer.

The Holden Corporation Maintains a SIMPLE-IRA Retirement Plan for Its