Homework Answers
Answer 11-: The correct answer is (a) Increase the dollar value of assets and liabilities reported on the balance sheet. IFRS 16 Leases suggest to capitalize the right to use the asset with corresponding liability of lessor. Hence both will be increased after the compliance of IFRS 16.
Answer 12-: The correct option is (c) decreases net income, decreases assets and decreases shareholder's equity. It will be debited to statement of profit and loss and assets value will be decreased. Since it is debited to profit and loss so shareholder's equity will also be decreased.
Answer 13-: The correct option is (b). The difference between PBO and plan assets will be liability. Since the obligation of the Company is more than the investment made by the Company.
Answer 14-:
Present value of the Liability -: $30,000/ Present value factor of 8% at 3 years
= 30000 X 0.7938
=$23,815
Liability at the end of Year 1= $23815 X 1.08
=$25,720
hence the correct option will be (b).
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or companies renting equipment ünder leases (iesseedj tht to effect on 1/1/2019 for publicly traded companies...
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...
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 CELL BLANK - MEANING, ALL BOXES
MUST BE FILLED IN WITH AN I, D, OR NE.
Will someone please confirm all entries are...
When revenue is earned, what is the effect and the direction of the effect on the...
When revenue is earned, what is the effect and the direction of the effect on the balance sheet? increases assets, decreases stockholders' equity decreases assets, increases liabilities increases one asset decreases another asset increases assets, increases stockholders' equity
Puhlman Inc. provides a defined benefit pension plan to its employees. It smooths recognition of its...
Puhlman Inc. provides a defined benefit pension plan to its employees. It smooths recognition of its gains and losses when computing its market-related value to compute expected return. Additional information follows: December 31, Description 2017 2016 PBO ? $ 2,500,000 ABO $ 2,335,000 2,150,000 Fair value of plan assets ? 2,100,000 Market-related value of plan assets (smoothed recognition) 2,342,800 2,100,000 Benefit payments made 272,000 231,000 AOCI—net actuarial (gain) loss 114,000 -0- AOCI—prior service cost ? 400,000 Balance sheet pension asset...
Puhlman Inc. provides a defined benefit pension plan to its employees. It smooths recognition of its...
Puhlman Inc. provides a defined benefit pension plan to its employees. It smooths recognition of its gains and losses when computing its market-related value to compute expected return. Additional information follows: December 31, Description 2017 2016 PBO ? $ 2,500,000 ABO $ 2,335,000 2,150,000 Fair value of plan assets ? 2,100,000 Market-related value of plan assets (smoothed recognition) 2,342,800 2,100,000 Benefit payments made 272,000 231,000 AOCI—net actuarial (gain) loss 114,000 -0- AOCI—prior service cost ? 400,000 Balance sheet pension asset...
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...
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...
15. On January 2, 2020, Santos Leasing Company leases equipment to Tobias Co. with 5 equal...
15. On January 2, 2020, Santos Leasing Company leases equipment to Tobias Co. with 5 equal annual payments of $160,000 each, payable beginning January 2, 2020. Tobias Co. agrees to guarantee the $150,000 residual value of the asset at the end of the lease term. The expected value of the residual value is $50,000. Tobias's incremental borrowing rate is 10%; however, it knows that Santos's implicit interest rate is 8%. What journal entry would Tobias Co. make at January 2,...
USE THE FOLLOWING INFORMATION FOR 11-20 Interest (Cost) Rate Expected rate of return on plan assets...
USE THE FOLLOWING INFORMATION FOR 11-20 Interest (Cost) Rate Expected rate of return on plan assets Actual rate of return on plan assets Beginning of year balance in CASH Projected benefit obligation at the beginning of 2017 Service cost, 2017 Interest Cost Loss (gain) on PBO for assumption changes Less: Benefits paid to retirees during the year Projected benefit obligation at the end of 2017 Plan assets at the beginning of the year Actual return on plan assets Cash contributions...
The following incomplete (columns have missing amounts) pension spreadsheet is for Old Tucson Corporation (OTC). Plan...
The following incomplete (columns have missing amounts) pension spreadsheet is for Old Tucson Corporation (OTC). Plan assets Prior service cost Net (Gain) loss 50 Pension Expenses PBO (460) Cash Net Pension (Liability)/ Asset 50 (19) (1.50) ($ in millions) debit (credit) Beginning Balance Service cost Interest cost Expected return on assets Gain/loss on assets Amortization of: Prior service cost Net gain loss LOSS on PBO Contribution to funds Retiree benefits paid Ending balance (3) (21) 21 (44) 35 (35) 266...
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...
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...
When revenue is earned, what is the effect and the direction of the effect on the balance sheet? increases assets, decreases stockholders' equity decreases assets, increases liabilities increases one asset decreases another asset increases assets, increases stockholders' equity
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...
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...
15. On January 2, 2020, Santos Leasing Company leases equipment to Tobias Co. with 5 equal annual payments of $160,000 each, payable beginning January 2, 2020. Tobias Co. agrees to guarantee the $150,000 residual value of the asset at the end of the lease term. The expected value of the residual value is $50,000. Tobias's incremental borrowing rate is 10%; however, it knows that Santos's implicit interest rate is 8%. What journal entry would Tobias Co. make at January 2,...
USE THE FOLLOWING INFORMATION FOR 11-20 Interest (Cost) Rate Expected rate of return on plan assets Actual rate of return on plan assets Beginning of year balance in CASH Projected benefit obligation at the beginning of 2017 Service cost, 2017 Interest Cost Loss (gain) on PBO for assumption changes Less: Benefits paid to retirees during the year Projected benefit obligation at the end of 2017 Plan assets at the beginning of the year Actual return on plan assets Cash contributions...
The following incomplete (columns have missing amounts) pension spreadsheet is for Old Tucson Corporation (OTC). Plan assets Prior service cost Net (Gain) loss 50 Pension Expenses PBO (460) Cash Net Pension (Liability)/ Asset 50 (19) (1.50) ($ in millions) debit (credit) Beginning Balance Service cost Interest cost Expected return on assets Gain/loss on assets Amortization of: Prior service cost Net gain loss LOSS on PBO Contribution to funds Retiree benefits paid Ending balance (3) (21) 21 (44) 35 (35) 266...
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