Exam 14: Pensions and Postretirement Benefits

The trustee for the Bronson Corporation pension sent a report to the CEO with the following information for the fiscal year: Beginning balance of plan assets at fair value \ 1,560,000 Actual return on plan assets \ 210,000 Employer's contribution \ 150,000 Distributions to retirees \ 75,000 Service cost \ 125,000 Interest cost I \ 156,000 Loss from changes in benefits or assumptions \ 35,000 Beginning balance of the PBO \ 1,580,000 -The ending balance of the pension benefit obligation (PBO)is

Which of the following is often not a component of other postretirement benefit expense?

A pension liability arises when pension expense exceeds pension funding.

The trustee for the Bronson Corporation pension sent a report to the CEO with the following information for the fiscal year: Beginning balance of plan assets at fair value \ 1,560,000 Actual return on plan assets \ 210,000 Employer's contribution \ 150,000 Distributions to retirees \ 75,000 Service cost \ 125,000 Interest cost I \ 156,000 Loss from changes in benefits or assumptions \ 35,000 Beginning balance of the PBO \ 1,580,000 -At the end of the year,the pension plan is

Expected return on pension plan assets causes reported pension expense to increase for defined benefit plans.

IFRS requires that the discount rate be used to compute the expected return on plan assets.

Changes in the discount rate on pension plans cause material differences in

U.S.tax law limits the deductibility of contributions to pension plans for firms whose plans

The smoothing of pension expense is

TKE Corporation established a defined benefit pension plan in 2012. TKE has provided the following information for the year ended December 31, 2014: Service cost \ 90,000 Interest cost \ 120,000 Actual return on plan assets \ 70,000 Expected return on plan assets \ 80,000 Amortization of prior service costs \ 30,000 -The pension expense for 2014 is

The Marino Company has provided you the following information pertaining to its defined benefit pension plan that was adopted on January 1, 2014: • The service cost was $950,000 during 2014 and $1,045,000 during 2015. • The prior service cost amortization each year was $290,000. • The contribution to the pension plan was $1,500,000 on December 31, 2014 and $1,800,000 on December 31, 2015. • The actuarially determined discount rate and the expected return on plan assets was 10%. • The actual return on plan assets was 9.5%. • Retirement benefits pertaining to years of service prior to 2014 were granted to the employees. The prior service cost is being amortized over the remaining ten-year life of the employees. -What is the pension expense for the year ended December 31,2014?

Smith, Inc. has a pension plan with the following data available for 2014 and 2015: 2014 2015 Service cost \ 30,000 \ 34,000 Interest cost \ 18,000 \ 20,000 Actual return on plan assets \ 15,000 \ 21,600 Beginning of year plan assets \ 200,000 \ 240,000 Settlement rate 8\% 8\% Expected return on plan assets 8\% 8\% -The deferred gain or loss from the return on plan assets for 2014 is

The trustee for the Bronson Corporation pension sent a report to the CEO with the following information for the fiscal year: Beginning balance of plan assets at fair value \ 1,560,000 Actual return on plan assets \ 210,000 Employer's contribution \ 150,000 Distributions to retirees \ 75,000 Service cost \ 125,000 Interest cost I \ 156,000 Loss from changes in benefits or assumptions \ 35,000 Beginning balance of the PBO \ 1,580,000 -At the beginning of the year,the pension plan is

Swan Company has provided you with the following data pertaining to its pension plan for the year ended December 31,2014: • The 2014 service cost was $175,500. • The projected benefit obligation as of January 1,2014 was $1,950,000. • Plan assets as of January 1,2014 totaled $2,020,000. • The actual return on plan assets during 2014 was 10%. • Amortization of prior service costs during 2014 was $9,750. • The expected return on plan assets was 8%. • The pension plan funding during 2014 totaled $170,000. • The settlement/discount rate was 8%. Prepare the journal entry to record pension expense for the year ended December 31,2014.

The difference between the actual and expected return on plan assets during year two is a component of pension expense for year two.

Smith, Inc. has a pension plan with the following data available for 2014 and 2015: 2014 2015 Service cost \ 30,000 \ 34,000 Interest cost \ 18,000 \ 20,000 Actual return on plan assets \ 15,000 \ 21,600 Beginning of year plan assets \ 200,000 \ 240,000 Settlement rate 8\% 8\% Expected return on plan assets 8\% 8\% -Smith's pension expense for 2014 is

The following information pertains to Grumpy Company's defined benefit pension plan: Pension asset as of 1/01/14 \ 4,000 2014 service cost \ 38,000 2014 interest cost \ 76,000 2014 prior service cost amortization \ 12,000 2014 expected return on plan assets \ 44,000 2014 plan asset contributions \ 80,000 Unamortized prior service cost as of 1/01/14 \ 48,000 What amount should Grumpy record as a pension asset on its December 31,2014 balance sheet?

the beginning of 2014, Moony, Inc. has a cumulative unrecognized loss of $50,000 in its pension plan. The estimated remaining service period of active employees is 12 years for both years. 2014 2015 Beginning plan asset value \ 335,000 \ 350,000 Beginning projected benefit obligation 325,000 385,000 Current year gain or (loss) (37,500) 25,000 -The amortization of accumulated unrecognized losses for 2014 is

Differences between IFRS and U.S.GAAP in accounting for pensions include all of the following except:

Krabby,Inc.had the following information at December 31,2014: The following assumptions are being used for the pension plan in 2015: You have the following additional information for 2015: Service cost \ 442 Cash contributed to the plan at year end 250 Pension benefits paid by the plan at year end 465 Actual return on plan assets 650 New actuarial loss on the projected benefit obligation 64 Required: 1.Compute pension expense for 2015. 2.Compute plan assets at December 31,2015. 3.Compute the projected benefit obligation at December 31,2015. 4.Compute Krabby's Unrecognized Actuarial (Gain)Loss at December 31,2015. 5.Compute the amount of the pension asset/liability that will appear on Krabby's December 31,2015 balance sheet.