When a company amends a pension plan, for accounting purposes, prior service costs should be: Select...
When a company amends a pension plan, for accounting purposes, prior service costs should be:
Select one:
a. added as a liability on the company's primary books.
b. recorded as an increase in the projected benefit obligation.
c. amortized in accordance with procedures used for income tax purposes.
d. reported as an expense in the period the plan is amended
e. reported as an adjustment to Retained Earnings
Homework Answers
Solution:
When a company amends a pension plan, for accounting purposes, prior service costs should be "reported as an adjustment to Retained Earnings"
Hence option e is correct.
Add Answer to:
When a company amends a pension plan, for accounting purposes,
prior service costs should be:
Select...
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beginning balances: plan assets $600,000; projected benefit
obligation $600,000. Other data relating to 3 years’ operation of
the plan are shown below:
Instructions
(a) Prepare a pension worksheet
presenting all 3 years’ pension balances and activities.
Use of Excel is REQUIRED.
(b) Prepare the journal entries (from
the worksheet) to reflect all pension plan transactions and events
at December 31 of each...
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1.
The company has 200 employees. All these employees are expected
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