Question

Projected benefit obligation Fair value of plan assets $2,100,000 $2,340,000 1,680,000 2,460,000 2,550,000 Required: a schedule which reflects the n expense Based on the above information about Gibbs Company, prepart of pension amount of net gain or loss to be amortized by the company as a componentin the straight-ine for the years 2010 and 2011. The company amortizes net method over the average service life of participating employees. gains or losses using Circie the correct answer in each of the following (Show caiculations where needed) 1. January 1, 2011 Abc corporation granted options to purchase 9,000 of its common shares a S7 each (option price). The market price of common stock was $9 per and averaged $9 per share during the quarter then ended. There was no change in the shares of outstanding common stock during the quarter ended March 31,2011. Net income for the quarter was $8,268. The number of shares to be used in computing diluted EPS for the quarter is a) 50,000 b)52,000 share on March 31, 2011 50,000 c) 53,000 d) 59,000 2.The computation of pension expense includes all the following except a. service cost component measured using current salary leveis. b. interest on projected benefit obligation. c. expected return on plan assets d. All of these are included in the computation.

Answer 1

1. Option D 59000 shares is the correct answer

2. Option A is the correct answer.

In the computation of Pension expense, the service cost component is measured on the projected benefit obligation using future compensation levels.