What could you do to boost Net Income in the current period? a. Increase the expected...
What could you do to boost Net Income in the current period?
a. Increase the expected long-term rate of return on plan assets b. Delay cash distributions to the pension. c. Contribute more cash to pension.
Homework Answers
To boost net income in the current period, the expected long-term rate of return on plan assets should be increased.
Therefore, the correct answer is a. Increase the expected long-term rate of return on plan assets
Explanation:
Increasing the expected long-term rate of return on plan assets will decrease reported costs based on higher expected future income.
Add Answer to:
What could you do to boost Net Income in the current period?
a. Increase the expected...
What could you do to preserve cash while having minimal effect to the income statement? a....
What could you do to preserve cash while having minimal effect to the income statement? a. Increase the expected long-term rate of return on plan assets AND immediately shift the assets into something that earns a higher rate of return. b. Delay cash contributions to the pension c. Contribute more cash to pension but don’t distribute cash from the plan assets to the plan members.
1. Explain why the costs of debt and equity are expected to increase as leverage increase?...
1. Explain why the costs of debt and equity are expected to increase as leverage increase? (Note: We didn't cover this directly in class, but we talked about this indirectly. Hint: It has to do with risk) 2. If the Debt-to-Asset ratio is .46, what is the Debt-to-Equity ratio? 3. Suppose a farm business indicates an average cost of farm debt of 12%, a rate-of-return on farm assets of 15%, and a debt-to-equity ratio of 1.0. What is the firm's...
Interest (Cost) Rate Expected rate of return on plan assets Actual rate of return on plan...
Interest (Cost) Rate Expected rate of return on plan assets Actual rate of return on plan assets Beginning of year balance in CASH 3% 3% 4% 120,000 Projected benefit obligation at the beginning of 2017 Service cost, 2017 Interest Cost Loss (gain) on PBO for assumption changes Less: Benefits paid to retirees during the year $ $ 350,000 40,000 $ $ 3,500 (45,000) Projected benefit obligation at the end of 2017 $ 250,000 Plan assets at the beginning of the...
What is the values of Net income versus the total for operating activities: What are the...
What is the values of Net income versus the total for operating
activities:
What are the items of significance between net income and total
for operating activities?
Is the business providing cash flow from operations?
Describe outstanding long-term assets in type & amount of
purchased, sold, or retired during the current period as well as
last year.
Describe outstanding financing activities used by the
corporation to increase cash or other assets. It would be related
to long-term liabilities and stockholders'...
USE THE FOLLOWING INFORMATION FOR 11-20 Interest (Cost) Rate Expected rate of return on plan assets...
USE THE FOLLOWING INFORMATION FOR 11-20 Interest (Cost) Rate Expected rate of return on plan assets Actual rate of return on plan assets Beginning of year balance in CASH Projected benefit obligation at the beginning of 2017 Service cost, 2017 Interest Cost Loss (gain) on PBO for assumption changes Less: Benefits paid to retirees during the year Projected benefit obligation at the end of 2017 Plan assets at the beginning of the year Actual return on plan assets Cash contributions...
Exercise 19-59 Defining Pension Terminology LO1, 2, 3, 4, 5, 6 e Terms relating to concepts...
Exercise 19-59 Defining Pension Terminology LO1, 2, 3, 4, 5, 6 e Terms relating to concepts discussed in this chapter along with descriptions of the terms are included in the fol lowing two lists. 1. Projected benefit a. Amount reported as pension expense for the period; has five components. obligation b. Allocation of the cost of retroactive pension benefits to periodic expense. - 2. Expected retum on c. Actuarial present value of future pension benefits camed as of the plan...
USE THE FOLLOWING INFORMATION FOR # 11-20 Interest (Cost) Rate Expected rate of return on plan...
USE THE FOLLOWING INFORMATION FOR # 11-20 Interest (Cost) Rate Expected rate of return on plan assets Actual rate of return on plan assets Beginning of year balance in CASH 3% 3% 49% $ 120,000 e beginning of 2017 Projected benefit obligation at the beginning of 2017 Service cost, 2017 Interest Cost Loss (gain) on PBO for assumption changes Less: Benefits paid to retirees during the year S $ 350,000 40,000 $ $ 3.500 (45,000) Projected benefit obligation at the...
3% Interest (Cost) Rate Expected rate of return on plan assets Actual rate of return on...
3% Interest (Cost) Rate Expected rate of return on plan assets Actual rate of return on plan assets Beginning of year balance in CASH 3% 120,000 $ $ Projected benefit obligation at the beginning of 2017 Service cost, 2017 Interest Cost Loss (gain) on PBO for assumption changes Less: Benefits paid to retirees during the year 350,000 40,000 $ $ 3,500 (45,000) Projected benefit obligation at the end of 2017 $ 250,000 Plan assets at the beginning of the year...
For each of the following, indicate whether the item would increase pension expense for the current...
For each of the following, indicate whether the item would increase pension expense for the current year, decrease pension expen current year, or have no effect on pension expense for the current year. Assume a defined benefit pension plan, and that ASPE is fo (a) The discount rate is applied to plan assets. (b) Past service costs granted during the year. (c) Benefits paid to retired employees. (d) Current statistics used by the actuary indicate more employees are retiring at...
USE THE FOLLOWING INFORMATION FOR # 11-20 Interest (Cost) Rate Expected rate of return on plan...
USE THE FOLLOWING INFORMATION FOR # 11-20 Interest (Cost) Rate Expected rate of return on plan assets Actual rate of return on plan assets Beginning of year balance in CASH 3% 3% 4% 120,000 $ e beginning of 2017 Projected benefit obligation at the beginning of 2017 Service cost, 2017 Interest Cost Loss (gain) on PBO for assumption changes Less: Benefits paid to retirees during the year $ $ 350,000 40,000 $ $ 3.500 (45,000) Projected benefit obligation at the...
1. Explain why the costs of debt and equity are expected to increase as leverage increase? (Note: We didn't cover this directly in class, but we talked about this indirectly. Hint: It has to do with risk) 2. If the Debt-to-Asset ratio is .46, what is the Debt-to-Equity ratio? 3. Suppose a farm business indicates an average cost of farm debt of 12%, a rate-of-return on farm assets of 15%, and a debt-to-equity ratio of 1.0. What is the firm's...
Interest (Cost) Rate Expected rate of return on plan assets Actual rate of return on plan assets Beginning of year balance in CASH 3% 3% 4% 120,000 Projected benefit obligation at the beginning of 2017 Service cost, 2017 Interest Cost Loss (gain) on PBO for assumption changes Less: Benefits paid to retirees during the year $ $ 350,000 40,000 $ $ 3,500 (45,000) Projected benefit obligation at the end of 2017 $ 250,000 Plan assets at the beginning of the...
What is the values of Net income versus the total for operating
activities:
What are the items of significance between net income and total
for operating activities?
Is the business providing cash flow from operations?
Describe outstanding long-term assets in type & amount of
purchased, sold, or retired during the current period as well as
last year.
Describe outstanding financing activities used by the
corporation to increase cash or other assets. It would be related
to long-term liabilities and stockholders'...
USE THE FOLLOWING INFORMATION FOR 11-20 Interest (Cost) Rate Expected rate of return on plan assets Actual rate of return on plan assets Beginning of year balance in CASH Projected benefit obligation at the beginning of 2017 Service cost, 2017 Interest Cost Loss (gain) on PBO for assumption changes Less: Benefits paid to retirees during the year Projected benefit obligation at the end of 2017 Plan assets at the beginning of the year Actual return on plan assets Cash contributions...
Exercise 19-59 Defining Pension Terminology LO1, 2, 3, 4, 5, 6 e Terms relating to concepts discussed in this chapter along with descriptions of the terms are included in the fol lowing two lists. 1. Projected benefit a. Amount reported as pension expense for the period; has five components. obligation b. Allocation of the cost of retroactive pension benefits to periodic expense. - 2. Expected retum on c. Actuarial present value of future pension benefits camed as of the plan...
USE THE FOLLOWING INFORMATION FOR # 11-20 Interest (Cost) Rate Expected rate of return on plan assets Actual rate of return on plan assets Beginning of year balance in CASH 3% 3% 49% $ 120,000 e beginning of 2017 Projected benefit obligation at the beginning of 2017 Service cost, 2017 Interest Cost Loss (gain) on PBO for assumption changes Less: Benefits paid to retirees during the year S $ 350,000 40,000 $ $ 3.500 (45,000) Projected benefit obligation at the...
3% Interest (Cost) Rate Expected rate of return on plan assets Actual rate of return on plan assets Beginning of year balance in CASH 3% 120,000 $ $ Projected benefit obligation at the beginning of 2017 Service cost, 2017 Interest Cost Loss (gain) on PBO for assumption changes Less: Benefits paid to retirees during the year 350,000 40,000 $ $ 3,500 (45,000) Projected benefit obligation at the end of 2017 $ 250,000 Plan assets at the beginning of the year...
For each of the following, indicate whether the item would increase pension expense for the current year, decrease pension expen current year, or have no effect on pension expense for the current year. Assume a defined benefit pension plan, and that ASPE is fo (a) The discount rate is applied to plan assets. (b) Past service costs granted during the year. (c) Benefits paid to retired employees. (d) Current statistics used by the actuary indicate more employees are retiring at...
USE THE FOLLOWING INFORMATION FOR # 11-20 Interest (Cost) Rate Expected rate of return on plan assets Actual rate of return on plan assets Beginning of year balance in CASH 3% 3% 4% 120,000 $ e beginning of 2017 Projected benefit obligation at the beginning of 2017 Service cost, 2017 Interest Cost Loss (gain) on PBO for assumption changes Less: Benefits paid to retirees during the year $ $ 350,000 40,000 $ $ 3.500 (45,000) Projected benefit obligation at the...
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