Using the following key, identify the effects of the following transactions or conditions on the various financial statement elements: I = increases; D = decreases; NE = no effect.
Note that the questions pertain to the employer’s financial statements, not to the pension plan’s financial statements. Analyze effects on the current year only.
DO NOT LEAVE ANY CELL BLANK - MEANING, ALL BOXES MUST BE FILLED IN WITH AN I, D, OR NE.
Will someone please confirm all entries are correct (THE ITEMS HIGHLIGHTED IN YELLOW)?
*******I am unsure about SE, and those reflecting no effect in assets/liabilities (for example - not sure if the increase in liability decreases assets, or there is no effect).*******
Pension plan events or conditions |
Assets |
Liabilities |
Shareholders’ equity |
Net incom |
Employees performing current services |
Increase |
Decrease |
||
Plan amendment grants retroactive benefits | Increase | |||
Projected benefit obligation accrues interest at the settlement rate |
Decrease | Decrease | ||
Unexpected increases in PBO due to changes in actuarial assumptions |
Decrease | |||
Retried employees are paid benefits |
Decrease | |||
Contributions made to plan trustee |
Increase | Increase | ||
Plan assets increase by expected return from investing |
Increase |
Decrease | ||
Unexpected decrease in FMV of plan assets due to an asset loss |
Decrease | |||
Amortization of prior service cost |
No Effect |
|||
Amortization of gain |
No Effect |
Using the following key, identify the effects of the following transactions or conditions on the various...
Using the following key, identify the effects of the following
transactions or conditions on the various financial statement
elements: I = increases; D = decreases; NE = no effect.
Note that the questions pertain to the employer’s financial
statements, not to the pension plan’s financial statements. Analyze
effects on the current year only.
DO NOT LEAVE ANY ITEM BLANK
Will someone please confirm all entries are
correct?
Not sure about SE, and those reflecting no effect in
assets/liabilities (for example...
Indicate by letter whether each of the events listed below increases (1), decreases (D), or has no effect (N) on an employer's projected benefit obligation. Events 1. Interest cost. 2. Amortization of prior service cost. 3. A decrease in the average life expectancy of employees. 4. An increase in the average life expectancy of employees. 5. A plan amendment that increases benefits is made retroactive to prior years. 6. An increase in the actuary's assumed discount rate. 7. 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...
Analyzing and Interpreting Pension and Health Care Footnote Xerox Corporation reports the following pension and retiree health care (“Other”) footnote as part of its 10-K report. December 31, 2015 ($ millions) Pension Benefits Retiree Health Change in Benefit Obligation Benefit obligation, January 1 $11,855 $937 Service cost 36 7 Interest cost 295 34 Plan participants’ contributions 4 14 Actuarial loss (332) (4) Currency exchange rate changes (538) (25) Plan amendments and curtailments (17) (31) Benefits paid/settlements (638) (77) Benefit obligation,...
Can I get a step by step walk on how to work this problem out
using the provided worksheet.following information relates to the
current-year activity of the defined benefit pension plan of Kim
Company, whose stock is publicly traded: Service cost $240,000
Expected return on plan assets 60,000 Interest cost on pension
benefit obligation 80,000 Amortization of actuarial loss 20,000
Amortization of prior service cost 10,000 Kim’s pension cost for
the current year is A. $240,000 B. $260,000 C. $270,000...
Analyzing and Interpreting Pension Disclosures Assume E.I. Du Pont De Nemours and Co.'s 10-K report has the following disclosures related to its retirement plans ($ millions). Pension Benefits ($ millions) 2010 2009 Change in benefit obligation Benefit obligation at beginning of year $ 22,849 $ 22,935 Service cost 383 388 Interest cost 1,228 1,192 Plan participants' contributions 13 9 Acturarial loss (gain) (728) (244) Benefits paid (1,544) (1,506) Amendments -- (1) Net effects of acquisitions/divestitures 5 76 Benefit obligation at...
QUESTION 7 The following information relates to the defined benefit pension plan of Nelson, Inc.: Projected benefit obligation Fair value of plan assets Accumulated OCI - net actuarial gain Settlement rate (for year) Expected rate of return (for year) 12/31/19 2,644,000 3,118,000 432,000 12/31/20 4,002,000 3,328,000 480,000 6% 6% 8% 7% For 2020, Nelson estimates that the average remaining service life of its current employees is 8 years. Nelson's contribution to the plan was $364,000 in 2020 and benefits paid...
Exercise 20-10 (Part Level Submission) Novak Corp. sponsors a defined benefit pension plan for its employees. On January 1, 2017, the following balances relate to this plan. Plan assets Projected benefit obligation Pension asset/liability Accumulated OCI (PSC) $469,800 607,000 137,200 97,100 Dr. As a result of the operation of the plan during 2017, the following additional data are provided by the actuary. Service cost $91,100 Settlement rate, 8% Actual return on plan assets Amortization of prior service cost Expected return...
Coronado Company sponsors a defined benefit pension plan for its employees. The following data relate to the operation of the plan for the year 2020 in which no benefits were paid. 1. The actuarial present value of future benefits earned by employees for services rendered in 2020 amounted to $56,100. Minimize global navigation res a contribution to the pension trustee amounting to $136,572 for 2020. 3. As of January 1, 2020, the company had a projected benefit obligation of $903,400,...
Coronado Company sponsors a defined benefit pension plan for its
employees. The following data relate to the operation of the plan
for the year 2020 in which no benefits were paid. 1. The actuarial
present value of future benefits earned by employees for services
rendered in 2020 amounted to $56,100. 2. The company’s funding
policy requires a contribution to the pension trustee amounting to
$136,572 for 2020. 3. As of January 1, 2020, the company had a
projected benefit obligation...