Exam 8: Cost-Based Inventories and Cost of Sales

Bonnie joined a firm at age 25 and is expected to retire at 57.The post-retirement benefit plan provides the following coverage given the indicated years of service after age 30. What is Bonnie's full eligibility date (her age when fully eligible)?

Under the simplified approach to accounting for defined benefit pension plans under ASPE there may be a pension asset ceiling.

A firm has a $40,000 balance in its pension liability account.This means:

The formula used to calculate pension expense must necessarily be the same as the formula used to calculate funding to the plan.

Funding a pension plan may be handled as follows:

Changes in defined benefit pension plans that reduce the expected years of future service of present employees are:

Pension plans are drafted to meet Revenue Canada requirements so that the benefits received after retirement are not subject to income tax and the contributions by the employer are not a taxable benefit to the employee.

Jamieson Corp.sponsors a defined benefit plan for its employee group. The following data pertains to the plan's first 2 years in existence: Jamieson's defined benefit obligation as at December 31^st,Year 1 would be:

Jamieson Corp.sponsors a defined benefit plan for its employee group. The following data pertains to the plan's first 2 years in existence: Jamieson's pension expense as per ASPE for Year 2 would be:

Under both IFRS and ASPE,the balance in net pension liability (asset)account will equal the funded status of the registered defined benefit plan in question.

In a defined contribution pension plan the retirement benefits to the employee are not defined.

Benefits pursuant to a pension plan that are not contingent upon an employee's continuing service are referred to as:

Contributions made by an employer to a qualified pension plan usually are taxable to the employee at that time.

Current costs of a pension plan that occur each year due to service credits earned after the inception of the plan are called:

All three funding approaches result in full funding of a pension plan over time.

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:

Changes in defined benefit pension plans that eliminate or reduce,for a significant number of employees,the accrual of defined benefits for some or all of their future services are:

Johnson Corp.sponsors a defined benefit plan for its employee group. The following data pertains to the plan's first 2 years in existence: Additional information: - The plan was started on January 1^st,Year 1,with $30,000 of funding. - The company has a December 31^st,year-end. - The plan is non-contributory. - The company's long-term debt is subject to a 6% discount rate. What would be the pension expense for each of Years 1 and 2 under ASPE? To go from pension expense under IFRS to ASPE,we need simply take the OCI amounts from IFRS and add them to the IFRS pension expense amounts to get the pension expense under ASPE:

RST's pension plan provides retirement benefits of $8,000 per year to all employees who have worked for the company for at least 10 years.Contributions to the plan are made 75 percent by RST and 25 percent by the employees.The pension plan is characterized as both:

Current service costs are the main component of any defined contribution plan.