Question 1

Carolina Consulting Company has a defined benefit pension plan.The following pension-related data were available for the current calendar year:
  
There were no other relevant data.
Required:
1)Calculate the 2016 pension expense.Show calculations.
2)Prepare the 2016 journal entries to record pension expense and funding.
3)Prepare any journal entries to record any 2016 gains or losses.

Accepted Answer

The answer of Carolina Consulting Company has a defined benefit...

Question 2

With respect to Ralph,what is the interest cost to be included in Oregon's 2017 postretirement benefit expense,rounded to the nearest dollar?

Accepted Answer

A)  $7,802.
B)  $7,877.
C)  $8,766.
D)  None of these answer choices is correct.E) A) and B)
F) B) and C)

Question 3

With respect to Ralph,what is Oregon's expected postretirement benefit obligation (EPBO) at the end of 2016,rounded to the nearest dollar?

Accepted Answer

A)  $137,045.
B)  $205,593.
C)  $246,810.
D)  $768,000.E) All of the above
F) B) and D)

Question 4

What was the actuary's interest (discount) rate?

Accepted Answer

A)  7%.
B)  8%.
C)  9%.
D)  10%.E) A) and B)
F) A) and C) A

Question 5

The three components of pension expense that are present most often are:

Accepted Answer

A)  Service cost,prior service cost,and gain on plan assets.
B)  Service cost,interest cost,and gain from revisions in pension liability.
C)  Service cost,contribution cost,and prior service cost.
D)  Service cost,interest cost,and expected return on plan assets.E) None of the above
F) B) and C)

Question 6

Listed below are five terms followed by a list of phrases that describe or characterize each of the terms.Match each phrase with the number for the most correct term.

Accepted Answer

The answer of Listed below are five terms followed by...

Question 7

The attribution approach required by GAAP for postretirement health care plans is to assign:

Accepted Answer

A)  An equal fraction of the EPBO to each year the employee is on the company payroll.
B)  An equal fraction of the APBO to each year the employee is on the company payroll.
C)  An equal fraction of the APBO to each year of service from the employee's hire date to the employee's full eligibility date.
D)  An equal fraction of the EPBO to each year of service from the employee's hire date to the employee's full eligibility date.E) A) and B)
F) All of the above

Question 8

A net pension asset is the excess of the projected benefit obligation over the plan assets.

Accepted Answer

A) True 
 B)False

Question 9

Which of the following is not a way of measuring the pension obligation?

Accepted Answer

A)  Accumulated benefit obligation.
B)  Vested benefit obligation.
C)  Retiree benefit obligation.
D)  Projected benefit obligation.E) A) and B)
F) None of the above

Question 10

The amortization of a net gain has what effect on pension expense?

Accepted Answer

A)  Decreases it.
B)  Has no effect on it.
C)  Increases it (but only by the amount over 10% of the PBO) .
D)  Increases it (regardless of the amount) .E) None of the above
F) A) and C)

Question 11

Hart Corporation has an unfunded postretirement health care benefit plan.Life insurance and medical care benefits are provided to employees who render 12 years of service and attain age 55 while in service to the company.At the end of 2016,John Sousa is 35.He was hired by Hart five years ago at age 30 and is expected to retire at the age of 62.The expected postretirement benefit obligation for John is $50,000 at the end of 2016.
Required:
Calculate the accumulated postretirement benefit obligation at the end of 2016 and the service cost for 2016 pertaining to John.

Accepted Answer

APBO:$50,000 x 5/25 = $10,000
...

Question 12

Burrito Corporation has a defined benefit pension plan.Burrito received the following information for the current calendar year:
  
The expected long-term return on plan assets is 10%.There were no other relevant data for the year.
Required:
1)Determine Burrito's pension expense for the year.
2)Prepare the journal entries to record the pension expense and funding for the year.

Accepted Answer

The answer of Burrito Corporation has a defined benefit pension...

Question 13

Data pertaining to the postretirement health care benefit plan of Amazing Delivery Service include the following for the current calendar year:
  
Required:
1)Determine Amazing's postretirement benefit expense for the current year.
2)Prepare the journal entry to record the benefit expense for the current year.

Accepted Answer

The answer of Data pertaining to the postretirement health care...

Question 14

On January 1,2016,Tom's Transport Company's accumulated postretirement benefit obligation was $30,000,000.At the end of 2016,retiree benefits paid were $3,500,000.Service cost for 2016 is $6,000,000.At the end of 2016,there was no prior service cost or net gain or loss.Assumptions regarding the trend of future health care costs were revised at the end of 2016.This revision caused the actuary to revise downward the estimate of the APBO by $500,000.The appropriate discount rate was 6%.
Required:
Determine the amount of the accumulated postretirement benefit obligation at December 31,2016.

Accepted Answer

The answer of On January 1,2016,Tom's Transport Company's accumulated postretirement...

Question 15

Use the following to answer questions 
The following data are for Guava Company's retiree health care plan for the current calendar year.
 
-What is the correct entry to record postretirement benefit expense for the current year?

Accepted Answer

A)   
B)   
C)   
D)   E) A) and B)
F) A) and C)

Question 16

Listed below are six terms followed by a list of phrases that describe or characterize each of the terms.Match each phrase with the number for the most correct term.

Accepted Answer

The answer of Listed below are six terms followed by...

Question 17

Amortizing prior service cost for pensions and other postretirement benefit plans will:

Accepted Answer

A)  Decrease retained earnings.
B)  Increase assets.
C)  Decrease assets.
D)  Decrease shareholders' equity.E) B) and C)
F) B) and D)

Question 18

The PBO is increased by:

Accepted Answer

A)  An increase in the average life expectancy of employees.
B)  Amortization of prior service cost.
C)  An increase in the actuary's assumed discount rate.
D)  A return on plan assets that is lower than expected.E) B) and C)
F) None of the above

Question 19

Use the following to answer questions 
The following incomplete (columns have missing amounts) pension spreadsheet is for Old Tucson Corporation (OTC) .
 
-What is OTC's pension expense for the year?

Accepted Answer

A)  $78.
B)  $72.
C)  $66.
D)  $18.E) A) and B)
F) A) and C)

Question 20

Pension plans typically require some minimum period of employment before benefits vest.What is the 1974 federal law governing vesting (as well as other aspects of pensions)? What are the vesting rules?

Accepted Answer

The Employee Retirement Income Security ...

Exam 17: Pensions and Other Postretirement Benefits

Correct Answer
verified
11ea906f_55cb_a437_a7a0_9922c4801d9b_TB2444_00

With respect to Ralph,what is the interest cost to be included in Oregon's 2017 postretirement benefit expense,rounded to the nearest dollar?

Correct Answer
verified

With respect to Ralph,what is Oregon's expected postretirement benefit obligation (EPBO) at the end of 2016,rounded to the nearest dollar?

Correct Answer
verified

What was the actuary's interest (discount) rate?

Correct Answer
verified
A

The three components of pension expense that are present most often are:

Correct Answer
verified

Listed below are five terms followed by a list of phrases that describe or characterize each of the terms.Match each phrase with the number for the most correct term.

Correct Answer
verified
11ea906f_55c9_0c0c_a7a0_01bd3257b7ba_TB2444_00

The attribution approach required by GAAP for postretirement health care plans is to assign:

Correct Answer
verified

A net pension asset is the excess of the projected benefit obligation over the plan assets.

Correct Answer
verified

Which of the following is not a way of measuring the pension obligation?

Correct Answer
verified

The amortization of a net gain has what effect on pension expense?

Correct Answer
verified

Correct Answer
verified
APBO:$50,000 x 5/25 = $10,000
...
View Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Use the following to answer questions The following data are for Guava Company's retiree health care plan for the current calendar year. -What is the correct entry to record postretirement benefit expense for the current year?

Correct Answer
verified

Listed below are six terms followed by a list of phrases that describe or characterize each of the terms.Match each phrase with the number for the most correct term.

Correct Answer
verified

Amortizing prior service cost for pensions and other postretirement benefit plans will:

Correct Answer
verified

The PBO is increased by:

Correct Answer
verified

Use the following to answer questions The following incomplete (columns have missing amounts) pension spreadsheet is for Old Tucson Corporation (OTC) . -What is OTC's pension expense for the year?

Correct Answer
verified

Pension plans typically require some minimum period of employment before benefits vest.What is the 1974 federal law governing vesting (as well as other aspects of pensions)? What are the vesting rules?

Correct Answer
verified
The Employee Retirement Income Security ...
View Answer

Exam 17: Pensions and Other Postretirement Benefits

Correct Answerverified11ea906f_55cb_a437_a7a0_9922c4801d9b_TB2444_00

With respect to Ralph,what is the interest cost to be included in Oregon's 2017 postretirement benefit expense,rounded to the nearest dollar?

Correct AnswerverifiedShow Answer

With respect to Ralph,what is Oregon's expected postretirement benefit obligation (EPBO) at the end of 2016,rounded to the nearest dollar?

Correct AnswerverifiedShow Answer

What was the actuary's interest (discount) rate?

Correct AnswerverifiedA

The three components of pension expense that are present most often are:

Correct AnswerverifiedShow Answer

Listed below are five terms followed by a list of phrases that describe or characterize each of the terms.Match each phrase with the number for the most correct term.

Correct Answerverified11ea906f_55c9_0c0c_a7a0_01bd3257b7ba_TB2444_00

The attribution approach required by GAAP for postretirement health care plans is to assign:

Correct AnswerverifiedShow Answer

A net pension asset is the excess of the projected benefit obligation over the plan assets.

Correct AnswerverifiedShow Answer

Which of the following is not a way of measuring the pension obligation?

Correct AnswerverifiedShow Answer

The amortization of a net gain has what effect on pension expense?

Correct AnswerverifiedShow Answer

Correct AnswerverifiedAPBO:$50,000 x 5/25 = $10,000...View AnswerShow Answer

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Use the following to answer questions The following data are for Guava Company's retiree health care plan for the current calendar year. -What is the correct entry to record postretirement benefit expense for the current year?

Correct AnswerverifiedShow Answer

Listed below are six terms followed by a list of phrases that describe or characterize each of the terms.Match each phrase with the number for the most correct term.

Correct AnswerverifiedShow Answer

Amortizing prior service cost for pensions and other postretirement benefit plans will:

Correct AnswerverifiedShow Answer

The PBO is increased by:

Correct AnswerverifiedShow Answer

Use the following to answer questions The following incomplete (columns have missing amounts) pension spreadsheet is for Old Tucson Corporation (OTC) . -What is OTC's pension expense for the year?

Correct AnswerverifiedShow Answer

Pension plans typically require some minimum period of employment before benefits vest.What is the 1974 federal law governing vesting (as well as other aspects of pensions)? What are the vesting rules?

Correct AnswerverifiedThe Employee Retirement Income Security ...View AnswerShow Answer

Correct Answer
verified
11ea906f_55cb_a437_a7a0_9922c4801d9b_TB2444_00

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
A

Correct Answer
verified

Correct Answer
verified
11ea906f_55c9_0c0c_a7a0_01bd3257b7ba_TB2444_00

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
APBO:$50,000 x 5/25 = $10,000
...
View Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
The Employee Retirement Income Security ...
View Answer