Question 1

Unrecognized prior service cost can be amortized based on which of the following methods?

Accepted Answer

A)  Straight-line method using any systematic rational approach 
B)  Straight-line method based on the average remaining service period of the qualified employees 
C)  Interest method using the actuary's discount rate 
D)  Service method based on the average remaining service period of the qualified employees 
A)  Straight-line method using any systematic rational approach 
B)  Straight-line method based on the average remaining service period of the qualified employees 
C)  Interest method using the actuary's discount rate 
D)  Service method based on the average remaining service period of the qualified employees B

Question 2

The following information relates to the defined benefit pension plan of the McDonald Company for the year ending December 31, 2011:
 
The net periodic pension cost reported in the income statement for 2011 would be

Accepted Answer

A)  $11,500. 
B)  $24,000. 
C)  $36,500. 
D)  $59,000. 
A)  $11,500. 
B)  $24,000. 
C)  $36,500. 
D)  $59,000. C

Question 3

Costs related to a new pension plan that are necessary to "catch up" for services rendered prior to the inception of the pension plan are classified as

Accepted Answer

A)  actuarial losses. 
B)  prior service costs. 
C)  retroactive deferred charges. 
D)  service costs. 
A)  actuarial losses. 
B)  prior service costs. 
C)  retroactive deferred charges. 
D)  service costs. B

Question 4

Based on the following data, determine the net periodic pension cost:

Accepted Answer

The answer of Based on the following data, determine the...

Question 5

Which of the following statements characterizes defined contribution plans?

Accepted Answer

A)  They are more complex in construction than defined benefit plans. 
B)  The employer's obligation is satisfied by making the appropriate amount of periodic contribution. 
C)  The investment risk is borne by the employer. 
D)  Contributions are made in equal amounts by employer and employees. 
A)  They are more complex in construction than defined benefit plans. 
B)  The employer's obligation is satisfied by making the appropriate amount of periodic contribution. 
C)  The investment risk is borne by the employer. 
D)  Contributions are made in equal amounts by employer and employees.

Question 6

Which of the following is not an issue in accounting for defined benefit plans?

Accepted Answer

A)  The amount of pension expense to be recognized 
B)  The amount of pension liability to be reported 
C)  The amount of funding (contributions) required by the plan 
D)  Disclosures needed to supplement the financial statements 
A)  The amount of pension expense to be recognized 
B)  The amount of pension liability to be reported 
C)  The amount of funding (contributions) required by the plan 
D)  Disclosures needed to supplement the financial statements

Question 7

On August 31, 2011, payroll data from the records of Earthtec Enterprises showed:
   
Provide the entries necessary to:

Accepted Answer

@#IMG-DLM& To record the payment of August 31 payr

Question 8

International accounting standards for pensions currently in effect

Accepted Answer

A)  allow both the accrued benefit and projected benefit methods. 
B)  allow only the accrued benefit method. 
C)  allow only the projected benefit method. 
D)  do not allow either the accrued benefit or projected benefit methods. 
A)  allow both the accrued benefit and projected benefit methods. 
B)  allow only the accrued benefit method. 
C)  allow only the projected benefit method. 
D)  do not allow either the accrued benefit or projected benefit methods.

Question 9

Which of the following concepts for postretirement benefit plans is comparable to the projected benefit obligation (PBO) of pension plans?

Accepted Answer

A)  Accumulated Postretirement Benefit Obligation (APBO) 
B)  Expected Postretirement Benefit Obligation (EPBO) 
C)  Actual return on plan assets 
D)  Expected return on plan assets 
A)  Accumulated Postretirement Benefit Obligation (APBO) 
B)  Expected Postretirement Benefit Obligation (EPBO) 
C)  Actual return on plan assets 
D)  Expected return on plan assets

Question 10

Colton Company sponsors a defined-benefit pension plan. Portions of footnote 9 from the company's annual report appear below:
The company has qualified defined-benefit pension plans covering most full-time employees. the status of the plans was follows (amounts in thousands of dollars):
   
Required:

Accepted Answer

The answer of Colton Company sponsors a defined-benefit pension plan....

Question 11

As an incentive, Wilson Enterprises awards an annual bonus to its branch managers. This year, the bonus for the Glendale branch was $44,000. The bonus agreement provides that each branch manager receives a bonus of 14 percent of the branch income after deductions for the bonus and for income taxes. The income tax rate is 30 percent.
Determine the income for the Glendale branch before the deductions for the bonus and the income taxes.

Accepted Answer

Let B = Bonus, T = Income Taxes, and I =

Question 12

On January 1, 2011, the Delhi Corp. amended its defined benefit pension plan to provide increased retirement benefits for its 150 employees covered by the plan on that date. As a result of the plan amendment, the projected benefit obligation as of January 1, 2011, increased by $1,275,000. Management decided to amortize this amount on a straight-line basis over the average remaining service life of the 150 employees. It is assumed that employees will retire at the rate of six employees per year over the next 25 years. The prior service cost is to be funded with equal annual contributions over a ten-year period. The first contribution is due at the end of 2011 and the assumed interest rate for funding purposes is 12 percent. The present value factor for an ordinary annuity for ten periods at 12 percent is 5.6502.

Accepted Answer

(1)[N(N + 1)/2] ´ D = Total future years

Question 13

Records for the Carp Corporation's defined-benefit pension plan show a net unrecognized loss at December 31, 2010, of $30,000, after recording the pension expense for 2010. The average expected service period of the company's employees is 10 years. The actuary notifies Carp's management that an actuarial gain of $4,000 is determined at January 1, 2011. Actual return for 2011 is $2,000, and expected return is $3,000. The following information also is available for the 2011:
 
The minimum amortization of unrecognized loss increases 2011 pension expense by what amount?

Accepted Answer

A)  $2,400 
B)  $1,700 
C)  $2,100 
D)  $2,600 
A)  $2,400 
B)  $1,700 
C)  $2,100 
D)  $2,600

Question 14

Which of the following is not correct?

Accepted Answer

A)  International accounting standards for pensions (IAS 19) do not include any provisions for the recognition of an additional minimum liability. 
B)  International accounting standards for pensions (IAS 19) do not allow for the recognition of a net pension asset in some circumstances. 
C)  International accounting standard for pensions (IAS 19) include the same 10% corridor amount in calculating the amortization of deferred gains and losses as found in U.S. GAAP. 
D)  International accounting standards for pensions (IAS 19) recognized pension gains and losses immediately as part of comprehensive income. 
A)  International accounting standards for pensions (IAS 19) do not include any provisions for the recognition of an additional minimum liability. 
B)  International accounting standards for pensions (IAS 19) do not allow for the recognition of a net pension asset in some circumstances. 
C)  International accounting standard for pensions (IAS 19) include the same 10% corridor amount in calculating the amortization of deferred gains and losses as found in U.S. GAAP. 
D)  International accounting standards for pensions (IAS 19) recognized pension gains and losses immediately as part of comprehensive income.

Question 15

Which of the following taxes is not included in the payroll tax expense of the employer?

Accepted Answer

A)  State unemployment taxes 
B)  Federal unemployment taxes 
C)  FICA taxes 
D)  Federal income taxes 
A)  State unemployment taxes 
B)  Federal unemployment taxes 
C)  FICA taxes 
D)  Federal income taxes

Question 16

The components of net periodic pension expense that involve delayed recognition are

Accepted Answer

A)  interest cost, prior service cost, transition cost, and expected return on plan assets. 
B)  service cost, transition cost, and gains and losses. 
C)  gains and losses, transition cost, and prior service cost. 
D)  transition cost, prior service cost, and expected return on plan assets. 
A)  interest cost, prior service cost, transition cost, and expected return on plan assets. 
B)  service cost, transition cost, and gains and losses. 
C)  gains and losses, transition cost, and prior service cost. 
D)  transition cost, prior service cost, and expected return on plan assets.

Question 17

The FASB's conclusion relating to the computation of the service cost component of pension expense is that the projected benefit obligation computed using

Accepted Answer

A)  future salary levels provides a reasonable measure of present pension obligation and expense. 
B)  present salary levels provides a reasonable measure of present pension obligation and expense. 
C)  present salary levels provides a reasonable measure of future pension obligation and expense. 
D)  future salary levels provides a reasonable measure of future pension obligation and expense. 
A)  future salary levels provides a reasonable measure of present pension obligation and expense. 
B)  present salary levels provides a reasonable measure of present pension obligation and expense. 
C)  present salary levels provides a reasonable measure of future pension obligation and expense. 
D)  future salary levels provides a reasonable measure of future pension obligation and expense.

Question 18

The following information relates to the defined benefit pension plan for the McDonald Company for the year ending December 31, 2011.
 
Using the information above, the actual return on plan assets for the year is

Accepted Answer

A)  $105,000. 
B)  $495,000. 
C)  $503,500. 
D)  $530,000. 
A)  $105,000. 
B)  $495,000. 
C)  $503,500. 
D)  $530,000.

Question 19

Trueblu Corporation is a publicly held company that supplies tourniquets to medical emergency centers. The company maintains a noncontributory defined benefit pension plan for its employees. The Trueblu's actuary has provided the following information for the year ended December 31, 2011:
 
Prior contributions to the defined benefit pension plan equaled the amount of net periodic pension cost accrued for the previous year end. If no contributions have been made for 2011 pension cost, what amount should Trueblu report in its December 31, 2011, balance sheet for accrued pension cost?

Accepted Answer

A)  $218,000 
B)  $242,000 
C)  $324,000 
D)  $406,000 
A)  $218,000 
B)  $242,000 
C)  $324,000 
D)  $406,000

Question 20

An enterprise provides for paid vacation periods for many of its employees. It is probable that these vacations will be taken, and there is a definite amount that accrues each year for each employee. Vacation benefits accrue in the amount of one paid vacation day per complete month of service, that is, an employee must work a complete month before receiving the benefits of another paid vacation day.
Given the above information, which of the following statements is correct?

Accepted Answer

A)  Given only the above information, vacation pay should be accrued monthly, as employees render service. 
B)  Only if the benefits vest should vacation pay be accrued before payment. 
C)  Only if the benefits accumulate should the vacation pay be accrued before payment. 
D)  If the benefits neither vest nor accumulate, then the vacation pay should be recognized as expense only when paid. 
A)  Given only the above information, vacation pay should be accrued monthly, as employees render service. 
B)  Only if the benefits vest should vacation pay be accrued before payment. 
C)  Only if the benefits accumulate should the vacation pay be accrued before payment. 
D)  If the benefits neither vest nor accumulate, then the vacation pay should be recognized as expense only when paid.

Unrecognized prior service cost can be amortized based on which of the following methods?

The following information relates to the defined benefit pension plan of the McDonald Company for the year ending December 31, 2011: The net periodic pension cost reported in the income statement for 2011 would be

Costs related to a new pension plan that are necessary to "catch up" for services rendered prior to the inception of the pension plan are classified as

Based on the following data, determine the net periodic pension cost:

Which of the following statements characterizes defined contribution plans?

Which of the following is not an issue in accounting for defined benefit plans?

On August 31, 2011, payroll data from the records of Earthtec Enterprises showed: Provide the entries necessary to:

International accounting standards for pensions currently in effect

Which of the following concepts for postretirement benefit plans is comparable to the projected benefit obligation (PBO) of pension plans?

Colton Company sponsors a defined-benefit pension plan. Portions of footnote 9 from the company's annual report appear below: The company has qualified defined-benefit pension plans covering most full-time employees. the status of the plans was follows (amounts in thousands of dollars): Required:

Which of the following is not correct?

Which of the following taxes is not included in the payroll tax expense of the employer?

The components of net periodic pension expense that involve delayed recognition are

The FASB's conclusion relating to the computation of the service cost component of pension expense is that the projected benefit obligation computed using

The following information relates to the defined benefit pension plan for the McDonald Company for the year ending December 31, 2011. Using the information above, the actual return on plan assets for the year is

Financial Reporting

A Review of the Accounting Cycle

The Balance Sheet and Notes to the Financial Statements

The Income Statement

Statement of Cash Flows and Articulation

Earnings Management

The Revenuereceivablescash Cycle

Revenue Recognition

Inventory and Cost of Goods Sold

Investments in Noncurrent Operating Assets-Acquisition

Investments in Noncurrent Operating Assets-Utilization and Retirement

Debt Financing

Equity Financing

Investments in Debt and Equity Securities

Leases

Income Taxes

Earnings Per Share

Derivatives, Contingencies, Business Segments, and Interim Reports

Accounting Changes and Error Corrections

Statement of Cash Flows Revisited

Accounting in a Global Market

Analysis of Financial Statements

Filters

Exam 17: Employee Compensation-Payroll, Pensions, Other Comp Issues

Unrecognized prior service cost can be amortized based on which of the following methods?

The following information relates to the defined benefit pension plan of the McDonald Company for the year ending December 31, 2011: The net periodic pension cost reported in the income statement for 2011 would be

Costs related to a new pension plan that are necessary to "catch up" for services rendered prior to the inception of the pension plan are classified as

Based on the following data, determine the net periodic pension cost:

Which of the following statements characterizes defined contribution plans?

Which of the following is not an issue in accounting for defined benefit plans?

On August 31, 2011, payroll data from the records of Earthtec Enterprises showed: Provide the entries necessary to:

International accounting standards for pensions currently in effect

Which of the following concepts for postretirement benefit plans is comparable to the projected benefit obligation (PBO) of pension plans?

Colton Company sponsors a defined-benefit pension plan. Portions of footnote 9 from the company's annual report appear below: The company has qualified defined-benefit pension plans covering most full-time employees. the status of the plans was follows (amounts in thousands of dollars): Required:

Which of the following is not correct?

Which of the following taxes is not included in the payroll tax expense of the employer?

The components of net periodic pension expense that involve delayed recognition are

The FASB's conclusion relating to the computation of the service cost component of pension expense is that the projected benefit obligation computed using

The following information relates to the defined benefit pension plan for the McDonald Company for the year ending December 31, 2011. Using the information above, the actual return on plan assets for the year is

Financial Reporting

A Review of the Accounting Cycle

The Balance Sheet and Notes to the Financial Statements

The Income Statement

Statement of Cash Flows and Articulation

Earnings Management

The Revenuereceivablescash Cycle

Revenue Recognition

Inventory and Cost of Goods Sold

Investments in Noncurrent Operating Assets-Acquisition

Investments in Noncurrent Operating Assets-Utilization and Retirement

Debt Financing

Equity Financing

Investments in Debt and Equity Securities

Leases

Income Taxes

Earnings Per Share

Derivatives, Contingencies, Business Segments, and Interim Reports

Accounting Changes and Error Corrections

Statement of Cash Flows Revisited

Accounting in a Global Market

Analysis of Financial Statements

Filters