The following pension plan information is for Farr Company at December 31, 2015. $\begin{array}{lr} \text { Projected benefit obligation } & \$ 8,500,000 \\ \text { Accumulated benefit obligation } & 7,500,000 \\ \text { Plan assets (at fair value) } & 6,150,000 \\ \text { Accumulated OCl (PSC) } & 540,000 \\ \text { Pension expense for 2015 } & 3,000,000 \\ \text { Contribution for 2015 } & 2,400,000 \end{array}$ The amount to be reported as the liability for pensions on the December 31, 2015 balance sheet is

A) $2,350,000. B) $2,150,000. C) $1,600,000. D) $1,350,000. A) $2,350,000. B) $2,150,000. C) $1,600,000. D) $1,350,000.

Presented below is pension information related to Woods, Inc. for the year 2015: $\begin{array}{lr} \text { Service cost } & \$ 82,000 \\ \text { Interest on projected benefit obligation } & 54,000 \\ \text { Interest on vested benefits } & 24,000 \\ \text { Amortization of prior service cost due to increase in benefits } & 12,000 \\ \text { Expected return on plan assets } & 18,000 \end{array}$ The amount of pension expense to be reported for 2015 is

A) $118,000. B) $154,000. C) $172,000. D) $130,000. A) $118,000. B) $154,000. C) $172,000. D) $130,000.

The following information pertains to Hopson Co.'s pension plan: $\begin{array}{lr} \text { Actuarial estimate of projected benefit obligation at } 1 / 1 / 15 & \$ 72,000 \\ \text { Assumed discount rate } & 10 \% \\ \text { Service costs for } 2015 & \$ 28,000 \\ \text { Pension benefits paid during 2015 } & \$ 15,000 \end{array}$ If no change in actuarial estimates occurred during 2015, Hopson's projected benefit obligation at December 31, 2015 was

A) $79,200. B) $80,000. C) $102,200. D) $87,200. A) $79,200. B) $80,000. C) $102,200. D) $87,200.

Presented below is pension information for Green Company for the year 2015: \[\begin{array} { l r } \text { Expected return on plan assets } & \$ 24,000 \\ \text { Interest on vested benefits } & 15,000 \\ \text { Service cost } & 50,000 \\ \text { Interest on projected benefit obligation } & 21,000 \\ \text { Amortization of prior service cost due to increase in benefits } & 18,000 \end{array}\] The amount of pension expense to be reported for 2015 is

A) $113,000. B) $89,000. C) $60,000. D) $65,000. A) $113,000. B) $89,000. C) $60,000. D) $65,000.

Exam 20: Accounting for Pensions and Postretirement Benefits

The following pension plan information is for Farr Company at December 31, 2015. Projected benefit obligation \ 8,500,000 Accumulated benefit obligation 7,500,000 Plan assets (at fair value) 6,150,000 Accumulated OCl (PSC) 540,000 Pension expense for 2015 3,000,000 Contribution for 2015 2,400,000 The amount to be reported as the liability for pensions on the December 31, 2015 balance sheet is

(Multiple Choice)

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(87)

Question 121

Presented below is pension information related to Woods, Inc. for the year 2015: Service cost \ 82,000 Interest on projected benefit obligation 54,000 Interest on vested benefits 24,000 Amortization of prior service cost due to increase in benefits 12,000 Expected return on plan assets 18,000 The amount of pension expense to be reported for 2015 is

(Multiple Choice)

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(90)

Question 122

Qualified pension plans permit deductibility of the employer's contributions to the pension fund.

(True/False)

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Question 123

The following information pertains to Hopson Co.'s pension plan: Actuarial estimate of projected benefit obligation at 1/1/15 \ 72,000 Assumed discount rate 10\% Service costs for 2015 \ 28,000 Pension benefits paid during 2015 \ 15,000 If no change in actuarial estimates occurred during 2015, Hopson's projected benefit obligation at December 31, 2015 was

(Multiple Choice)

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(69)

Question 124

Midland Company follows U.S. GAAP for its external financial reporting whereas Bailey Company follows IFRS for its external financial reporting. The amount contributed by Midland for its defined contribution plan for 2015 amounted to $55,000 and the amount contributed by Bailey for its defined contribution plan for 2015 amounted to $76,000. The remaining service lives of employees at both firms is estimated to be 10 years. What is the amount of expense related to pension costs recognized by each company in its income statement for the year ended December 31, 2015?

(Short Answer)

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Question 125

Use the following information for questions 68 through 70. The following information for Cooper Enterprises is given below: There were no actuarial gains or losses at January 1, 2015. The average remaining service life of employees is 10 years. -The amortization of Other Comprehensive Loss for 2016 is:

(Multiple Choice)

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Question 126

Prior service cost is amortized into income over the expected service lives of employees under both U.S. GAAP and IFRS.

(True/False)

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Question 127

Which of the following is true with regard to pension accounting under U.S. GAAP and IFRS?

(Multiple Choice)

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Question 128

Briefly explain the following terms:(a) Service cost(b) Interest cost(c) Prior service cost(d) Vested benefits

(Essay)

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Question 129

The actuarial gains or losses that result from changes in the projected benefit obligation are called

(Short Answer)

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Question 130

Companies should recognize the entire increase in projected benefit obligation due to a plan initiation or amendment as pension expense in the year of amendment.

(True/False)

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Question 131

The accumulated benefit obligation measures

(Multiple Choice)

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Question 132

When a company amends its defined benefit plan, and recognizes prior service, the projected benefit obligation is increased to recognize this additional liability.

(True/False)

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Question 133

Companies must disclose a reconciliation of how the projected benefit obligation and the fair value of plan assets changed during the year either in their financial statements or in the notes.

(True/False)

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Question 134

Use the following information for questions 80 through 84. The following information relates to the pension plan for the employees of Turner Co.: Turner estimates that the average remaining service life is 16 years. Turner's contribution was $882,000 in 2015 and benefits paid were $658,000. -The interest cost for 2015 is

(Multiple Choice)

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Question 135

Presented below is pension information for Green Company for the year 2015: Expected return on plan assets \ 24,000 Interest on vested benefits 15,000 Service cost 50,000 Interest on projected benefit obligation 21,000 Amortization of prior service cost due to increase in benefits 18,000 The amount of pension expense to be reported for 2015 is

(Multiple Choice)

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(73)

Question 136

Use the following information for questions 74 through 76. The following data are for the pension plan for the employees of Lockett Company. Lockett's contribution was $420,000 in 2015 and benefits paid were $375,000. Lockett estimates that the average remaining service life is 15 years. -The actual return on plan assets in 2015 was

(Multiple Choice)

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Question 137

Showing 121 - 137 of 137

Qualified pension plans permit deductibility of the employer's contributions to the pension fund.

Prior service cost is amortized into income over the expected service lives of employees under both U.S. GAAP and IFRS.

Which of the following is true with regard to pension accounting under U.S. GAAP and IFRS?

Briefly explain the following terms:(a) Service cost(b) Interest cost(c) Prior service cost(d) Vested benefits

The actuarial gains or losses that result from changes in the projected benefit obligation are called

Companies should recognize the entire increase in projected benefit obligation due to a plan initiation or amendment as pension expense in the year of amendment.

The accumulated benefit obligation measures

When a company amends its defined benefit plan, and recognizes prior service, the projected benefit obligation is increased to recognize this additional liability.

Companies must disclose a reconciliation of how the projected benefit obligation and the fair value of plan assets changed during the year either in their financial statements or in the notes.

Financial Accounting and Accounting Standards

Conceptual Framework for Financial Reporting

The Accounting Information System

Income Statement and Related Information

Balance Sheet and Statement of Cash Flows

Accounting and the Time Value of Money

Cash and Receivables

Valuation of Inventories: a Cost-Basis Approach

Inventories: Additional Valuation Issues

Acquisition and Disposition of Property, Plant, and Equipment

Depreciation, Impairments, and Depletion

Intangible Assets

Current Liabilities and Contingencies

Long-Term Liabilities

Stockholders Equity

Dilutive Securities and Earnings Per Share

Investments

Revenue Recognition

Accounting for Income Taxes

Accounting for Leases

Accounting Changes and Error Analysis

Statement of Cash Flows

Full Disclosure in Financial Reporting

Appendix

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