UNIVERSITY OF ILLINOIS AT URBANA-CHAMPAIGNCOLLEGE OF COMMERCE AND BUSINESS ADMINISTRATIOND E P A R T M E N T O F F I N A N C E Assignment 1 – Taxation and Overview of Employee BenefitsFinance/LIR 360 Fall 2002 Due:September 27, 2002Please detach and turn in only the answer sheet for this assignment. Keepyour worksheets and the remainder of the assignment for reference.For the first two questions, go to the Office of the Chief Actuary of the SocialSecurity Administration website (http://www.ssa.gov/OACT/pubs.html). Follow theappropriate links to get the information. 1. Based on the Highlights of the 2002 OASDI Trustees Report, when will thecombined OASI and DI Trust Funds be exhausted under the intermediateassumptions? 2. Based on the Assumptions About the Future Section of the 2002 OASDITrustees Report, what is the ultimate Total Fertility Rate under theintermediate assumptions?For the next two questions, go to the Employee Benefits section of the Bureau ofLabor Statistics website (http://www.bls.gov/ncs/ebs/home.htm). Follow theappropriate links to get the information. 3. Which benefit is most commonly available to full time workers? Whatpercent of full time workers have the benefit?4. What is the average number of vacation days for workers with 1 and 10years of service? For the next 6 questions, indicate the amount of taxable income for theemployee generated by each of the following non-contributory employeebenefits based on tax regulations applicable for 2002. Assume each plan is non-discriminatory based on applicable rules.4. the employer pays $180 to purchase $250,000 of group term life insurancefor the entire year on a 38 year old employee 5. the employer pays $600 for a group disability plan on which an employeecollects $8,400 in disability benefits during the year6. an employee receives $7,000 in salary continuation under a short termdisability income plan and $14,000 in medical expenses under healthinsurance resulting from a broken leg he incurred when he fell off a ladderat home7. an employee receives $1,200 in disability income under workerscompensation for a temporary total disability8. the employer pays $350 to purchase $50,000 of group permanent lifeinsurance for the entire year on a 68 year old retiree 9. an employee receives $6,500 in unemployment benefits after the firmdown-sized 10. How much of a tax credit would a totally and permanently disabled marriedperson be entitled to for 2002 if this person received a disability incomebenefit of $700 per month for the entire year from a noncontributory plan,a social security disability benefit of $300 per month for the last 6 monthsof 2002, and the couple’s total Adjusted Gross Income (including thedisability benefit) was $17,000 for the year?Finance/LIR 360 - Assignment 1Answer Sheet(List answers only. No need to show work here.)Name:_________________________Due: September 27,