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Date Taken:
Time Spent:
Points Received:
Question Type:
Multiple Choice
Essay
1/24/2014
54 min , 50 secs
40 / 40 (100%)
# Of Questions:
5
1
# Correct:
5
N/A
$84,000
$46,000
$30,000
$21,000
Student Answer:
$109,000.
$153,000.
$174,000.
$123,000.
Comments:
Question 2.Question :
Student Answer:
Instructor
Explanation:
Points Received:
the projected benefit obligation is less than the fair value of the
pension plan assets.
See Chapter 20.
5 of 5
Comments:
Question 3.Question :
Student Answer:
Instructor
Explanation:
Points Received:
5 of 5
Comments:
Question 4.Question :
(TCO C) Kathy's Kittens, Inc. has provided the following information for
their post-retirement benefits plan for 2013.
Service cost
$475,000
Discount rate
8%
APBO, January 1, 2013
$3,800,000
EPBO, January 1, 2013
$4,100,000
Average remaining service to full eligibility
20 years
Average remaining service to expected retirement 25 years
The amount of post-retirement expense for 2013 is
Student Answer:
$931,000.
$969,000.
$779,000.
$803,000.
Comments:
Question 5.Question :
(TCO C) On January 1, 2013, Laura's Living Company has the following defined
benefit pension plan balances.
Projected
benefit
$6,400,000
obligation
Fair value
of plan
6,900,000
assets
The interest (settlement) rate applicable to the plan is 10%. On January 1, 2014,
the company amends its pension agreement so that service costs of $335,000 are
created. Other data related to the pension plan are as follows.
2013
2014
Service costs $180,000 $190,000
Prior service
costs
$0
$86,000
amortization
Contributions
(funding) to $200,000 $206,000
the plan
Benefits paid $185,000 $215,000
Actual return
on plan
$621,000 $654,000
assets
Expected rate
of return on 9%
10%
assets
Required:
(a) Prepare a pension worksheet for the pension plan for 2013 and 2014.
(b) For 2014, prepare the journal entry to record pension-related amounts.
Student
Answer:
Items
Annual
Pension
Expense
Memo Record
Pension
Asset/
Liability
Projected
Benefit
Obligation
Plan
Assets
(b) For 2014, prepare the journal entry to record pension-related amounts.
Pension Expense
259,400
Other Comprehensive Income
249,000
(PSC)
Other Comprehensive Income
99,600
(G/L)
Cash
206,000
Pension Asset/Liability
402,000
Points Received:
15 of 15
Comments:
Question 6.Question :
following data relates to the operation of the plan for the year 2013.
Service cost
$350,000
Contributions to the plan
$225,000
Actual return on plan assets
$185,000
Projected benefit obligation (beginning of year)
$3,400,000
Fair value of plan assets (beginning of year)
$3,300,000
The expected return on plan assets and the settlement rate were both
9%. The amount of pension expense reported for 2013 is
Student Answer:
$471,000.00.
$359,000.00.
$350,000.00.
$656,000.00.
Comments: