Question

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.

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Answer #1

To preserve cash while having minimal effect to the income statement , we have to contribute more cash to pension but don't distribute cash from the plan assets to the plan members .

Because if we contribute cash to members then cash will be more shortage . and if we contribute more cash to pension and don't distribute it , cash will be stand by as pension .

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