Exam 17: Employee Compensation-Payroll,pensions, Other Compissues

Holster Western Wear,Inc.has a defined benefit pension plan covering its 120 employees.Information relating to the plan follows: Holster expects a 10 percent return on its pension fund assets.Compute the difference between the actual return and the expected return and explain how this amount affects net periodic pension cost for 2014.

Which of the following statements characterizes defined benefit plans?

On January 1,2014,Reason Co.estimated a projected benefit of $440,000 based on a settlement rate of 12 percent.Pension benefits paid to retirees totaled $60,000.Service costs for 2014 amounted to $148,000.The fair value of the plan assets were $350,000 and $400,000 on December 31,2013,and December 31,2014,respectively.The projected benefit obligation at December 31,2014,was

The areas of pension plans and other post retirement benefits (such as health care benefits)appear on the surface to be quite similar.Nonetheless,the Financial Accounting Standards Board issued its pronouncement on other postretirement benefits some five years after the issuance of the pronouncement on pensions. Explain why the FASB did not consider the areas of pensions and other post retirement benefits concurrently.

During a recent two-week period,the employees of Super Choppers,Inc.earned gross wages of $90,000.The following are the employee withholdings and payroll taxes pertinent to the period: Only $68,000 of wages are subject to FICA,and $31,000 are subject to unemployment taxes. (1)Prepare the entry to record the gross payroll. (2)Prepare the entry to record employer payroll taxes.

Records for the Bass Corporation's defined-benefit pension plan show a net unrecognized loss at December 31,2013,of $30,000,after recording the pension expense for 2013.The average expected service period of the company's employees is 10 years.The actuary notifies Bass's management that an actuarial gain of $4,000 is determined at January 1,2014.Actual return for 2014 is $2,000,and expected return is $3,000.The following information also is available for the 2014: The minimum amortization of unrecognized loss increases 2014 pension expense by what amount?

Using the information below,compute the gain or loss component of net periodic pension cost and indicate whether the amount is added or deducted in determining pension cost for the period.

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

Which of the following taxes must be paid by both the employee and the employer?

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

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

The following information relates to Aracely Inc.at December 31,2014: The total pension liability at December 31,2014,for Aracely Inc.is

Laid Back Corp.follows the practice of paying all employees for vacation.The vacation pay is not vested,but it carries over for one year if unused.Under GAAP,the obligation for earned but unused vacation should be

The following balances relate to the defined benefit pension plan of Rundgren Industries. No benefits were paid in either 2013 or 2014. Compute pension expense for 2013 and 2014,assuming minimum amortization is taken.

The following data relate to the defined benefit pension plan of the Brotherhood Corp.for the years 2013-2015: At December 31,2012,the books of Youngblood Corp.reflected a pension liability of $30,000.The fair value of pension fund assets at that date was $1,300,000.The pension fund is administered by an independent trustee. (1)Prepare the summary journal entries relating to the pension plan that would be required on the books of Youngblood Corp.for 2013,2014,and 2015. (2)Determine the balance of the prepaid/accrued pension cost account at December 31,2015. (3)Compute the fair value of pension fund assets as of December 31,2015.

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?

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

Evasive Corporation pays its employees monthly. The following information is available for the January payroll: All employees' salaries are subject to the tax rates mentioned above for Evasive Corporation. -Using the information above,Evasive's total expense related to the January payroll is

FASB ASC Topic 715 states that prior service cost should be

The following information relates to the defined benefit pension plan of the Bamberger Co.: (1)Compute the amount of service cost for 2014. (2)Prepare the reconciliation between the beginning and ending balances for the projected benefit obligation disclosure as required by GAAP.