The interest cost included in the annual pension cost recorded by an employer sponsoring a defined benefit pension plan...
- The interest cost included in the annual pension cost recorded by an employer sponsoring a defined benefit pension plan represents the
a) difference between the expected and actual return on plan assets.
b) increase in the defined benefit obligation due to the passage of time.
c) increase in the fair value of plan assets due to the passage of time.
d) interest earned on the plan assets for the year.
- An experience gain or loss (adjustment) is
a) additional contributions made to the pension fund by the employer.
b) additional contributions made to the pension fund by the employees.
c) reduced payments made to retirees.
d) the difference between what has occurred and the previous actuarial assumptions.
- The objective of accounting for defined benefit plans is to
a) calculate the actual amounts employees will receive at retirement.
b) recognize the appropriate expense and liability over the accounting periods in which the related services are provided by the employees.
c) calculate the current service cost.
d) determine which employees’ rights have vested.
- The obligation for a defined contribution plan is calculated by
a) discounting the benefit the employee will receive at retirement.
b) add up contributions made plus interest earned less any benefits paid out.
c) the cumulative contributions made to the pension plan.
d) the amount the employer is obligated to contribute for the period.
- Who assumes the economic risk for defined benefit pension plans?
a) actuarials
b) trustees
c) employees
d) employers
Homework Answers
Answer 1.
option b is correct
increase in the defined benefit obligation due to the passage of time.
Answer 2.
option d is correct
the difference between what has occurred and the previous actuarial assumptions.
Answer 3.
option b is correct
recognize the appropriate expense and liability over the accounting periods
Answer 4.
option b is correct
add up contributions made plus interest earned less any benefits paid out.
Answer 5.
option d is correct
Add Answer to:
The interest cost included in the annual pension cost recorded by an employer sponsoring a defined benefit pension plan...
The obligation for a defined contribution plan is calculated by a) discounting the benefit the employee...
The obligation for a defined contribution plan is calculated by a) discounting the benefit the employee will receive at retirement. b) add up contributions made plus interest earned less any benefits paid out. c) the cumulative contributions made to the pension plan. d) the amount the employer is obligated to contribute for the period.
#4 Velasquez Company has available the following information about its defined-benefit pension plan for the year...
#4 Velasquez Company has available the following information about its defined-benefit pension plan for the year ending December 31, 2018: Service cost for 2018 Accumulated benefit obligation Plan assets at fair value Accumulated OCI (PSC) Vested benefit obligation Market-related asset value Projected benefit obligation Accumulated OCI net gain Interest on projected benefit obligation $ 45,000 683,000 630,000 300,000 505,000 725,000 865,000 90,000 64,000 Instructions (a) Calculate the pension asset / liability to be recorded at December 31, 2018. (b) Calculate...
P19.12 You are the auditor of Beaton and Gunter Inc., the Canadian subsidiary of a public multinational engineering company that offers a defined benefit pension plan to its eligible employees. Employees are permitted to join the plan after two years of e
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The following information pertains to Rembrandt Inc.'s pension plan for calendar 2017: Defined benefit obligation...
The following information pertains to Rembrandt Inc.'s pension plan for calendar 2017: Defined benefit obligation at Jan 1/17................. $96,000 Interest (discount) rate...................................... 10% Current service costs......................................... $24,000 Pension benefits paid retirees............................ $20,000 The corporation uses IFRS. If no change in actuarial estimates occurred during 2017, Rembrandt's defined benefit obligation at December 31, 2017 would be (show your work) a) $85,600. b) $100,000. c) $105,600. d) $109,600. Presented below is information related to...
Brown Industries operates a defined benefit pension plan. Information received from the actuary and the trustee...
Brown Industries operates a defined benefit pension plan. Information received from the actuary and the trustee related to the Year 2 pension plan includes the following Projected benefit obligation, January 1, Year 2 Service cost Interest cost Retirement benefits paid Employer contribution Actual return on plan assets Amortization of prior service cost Amortization of prior-year net pension loss Fair value - - pension plan assets, December 31, Year 1 $1,889,000 105,000 190,000 182,000 155,000 215,000 122,000 37,000 1,825,000 Brown's Year...
Exercise 20-13 Wildhorse Company sponsors a defined benefit pension plan. The corporation's actuary provides the following...
Exercise 20-13 Wildhorse Company sponsors a defined benefit pension plan. The corporation's actuary provides the following information about the plan. January 1, 2017 $1,560 2,010 2,260 1,540 Vested benefit obligation Accumulated benefit obligation Projected benefit obligation Plan assets (fair value) Settlement rate and expected rate of return Pension asset/liability Service cost for the year 2017 Contributions (funding in 2017) Benefits paid in 2017 December 31, 2017 $2,010 2,820 3,630 2,560 10 % 720 400 730 200 (a) Compute the actual...
Information regarding the defined benefit pension plan of Duncan Services included Plan assets, January 1 126,772...
Information regarding the defined benefit pension plan of Duncan Services included Plan assets, January 1 126,772 Plan assets, December 31 233,015 Retiree benefits paid (end of year) 28,383 Employer contributions to the pension plan 109,610 (end of year) What was the actual return on plan assets for 2016?
Term Answer Description ERISA A. This pension plan meets specified criteria established by the Internal Revenue Code. V...
Term Answer Description ERISA A. This pension plan meets specified criteria established by the Internal Revenue Code. Vested rights B. The employee bears part of the contribution cost in this pension plan. c. Noncontributory pension plan Based on a formula, it computes the benefits, not contributions, to be paid out. Contributory pension plan D. Under this plan, the employer not only makes the contributions (based on a percentage of an employee's salary), controls the investment, and guarantees a given payout...
Bonita Company sponsors a defined benefit pension plan. The corporation’s actuary provides the following information about...
Bonita Company sponsors a defined benefit pension plan. The
corporation’s actuary provides the following information about the
plan.
January 1,
2017
December
31, 2017
Vested benefit
obligation
$1,390
$1,750
Accumulated benefit
obligation
1,750
2,850
Projected benefit
obligation
2,350
3,540
Plan assets (fair value)
1,820
2,550
Settlement rate and expected
rate of return
10
%
Pension asset/liability
530
?
Service cost for the year
2017
440
Contributions (funding in
2017)
720
Benefits paid in 2017
220
(a) Compute the actual return...
Presented below is information related to Peach Corporation’s defined benefit pension plan for calendar 2017. The...
Presented below is information related to Peach Corporation’s defined benefit pension plan for calendar 2017. The corporation uses IFRS. Defined benefit obligation, Jan 1............................. $200,000 Fair value of plan assets, Jan 1............................... 180,000 Current service cost................................................... 27,000 Contributions to plan................................................. 25,000 Actual and expected return on plan assets............ 9,000 Benefits paid to retirees............................................. 40,000 Interest (discount) rate............................................... 10% The fair value of the plan assets at December...
#4 Velasquez Company has available the following information about its defined-benefit pension plan for the year ending December 31, 2018: Service cost for 2018 Accumulated benefit obligation Plan assets at fair value Accumulated OCI (PSC) Vested benefit obligation Market-related asset value Projected benefit obligation Accumulated OCI net gain Interest on projected benefit obligation $ 45,000 683,000 630,000 300,000 505,000 725,000 865,000 90,000 64,000 Instructions (a) Calculate the pension asset / liability to be recorded at December 31, 2018. (b) Calculate...
Brown Industries operates a defined benefit pension plan. Information received from the actuary and the trustee related to the Year 2 pension plan includes the following Projected benefit obligation, January 1, Year 2 Service cost Interest cost Retirement benefits paid Employer contribution Actual return on plan assets Amortization of prior service cost Amortization of prior-year net pension loss Fair value - - pension plan assets, December 31, Year 1 $1,889,000 105,000 190,000 182,000 155,000 215,000 122,000 37,000 1,825,000 Brown's Year...
Exercise 20-13 Wildhorse Company sponsors a defined benefit pension plan. The corporation's actuary provides the following information about the plan. January 1, 2017 $1,560 2,010 2,260 1,540 Vested benefit obligation Accumulated benefit obligation Projected benefit obligation Plan assets (fair value) Settlement rate and expected rate of return Pension asset/liability Service cost for the year 2017 Contributions (funding in 2017) Benefits paid in 2017 December 31, 2017 $2,010 2,820 3,630 2,560 10 % 720 400 730 200 (a) Compute the actual...
Information regarding the defined benefit pension plan of Duncan Services included Plan assets, January 1 126,772 Plan assets, December 31 233,015 Retiree benefits paid (end of year) 28,383 Employer contributions to the pension plan 109,610 (end of year) What was the actual return on plan assets for 2016?
Term Answer Description ERISA A. This pension plan meets specified criteria established by the Internal Revenue Code. Vested rights B. The employee bears part of the contribution cost in this pension plan. c. Noncontributory pension plan Based on a formula, it computes the benefits, not contributions, to be paid out. Contributory pension plan D. Under this plan, the employer not only makes the contributions (based on a percentage of an employee's salary), controls the investment, and guarantees a given payout...
Bonita Company sponsors a defined benefit pension plan. The
corporation’s actuary provides the following information about the
plan.
January 1,
2017
December
31, 2017
Vested benefit
obligation
$1,390
$1,750
Accumulated benefit
obligation
1,750
2,850
Projected benefit
obligation
2,350
3,540
Plan assets (fair value)
1,820
2,550
Settlement rate and expected
rate of return
10
%
Pension asset/liability
530
?
Service cost for the year
2017
440
Contributions (funding in
2017)
720
Benefits paid in 2017
220
(a) Compute the actual return...
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