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

Feinberg,Inc.,provides a noncontributory defined benefit plan for its 200 employees.Information from the company's pension footnote for the year ended December 31,2013,and partial information for the year ended December 31,2014,are given below: The company's actuary indicated that the settlement rate and expected rate of return on plan assets were both 8% for 2013 and 2014.The company contributed $221,250 to the plan at the end of 2014.Service cost for 2014 was $125,000. On January 1,2013,the company amended its plan to grant retroactive credit for prior service rendered by employees prior to the amendment.This amendment increased unrecognized prior service cost by $125,000 at that date.The prior service cost is being amortized over the average remaining service life of the employees affected by the amendment.The average remaining service life of the workforce in each year has been constant at 10.5 years. (1)Prepare a schedule computing pension cost for 2014. (2)Prepare the journal entries to record pension expense and the pension contribution,and to recognize the correct minimum liability,if any. (3)Prepare the reconciliation between the beginning and ending balances of the projected benefit obligation as required by GAAP for the disclosures related to pension plans.

Employees of Mayhem Fabricators,Inc.earned gross wages of $140,000 during a recent two-week period.Employee withholdings and payroll tax percentages are presented below: Only $78,000 of wages are subject to FICA,and $36,000 are subject to unemployment taxes. (1)Prepare the entry to record the gross payroll. (2)Prepare the entry to record employer payroll taxes.

Jenine Company sponsors a noncontributory,defined benefit pension plan.On December 31,2014,the end of the company's accounting period,the company received the projected benefit obligation report from the independent actuary.The following data were included: Based on this information,the January 1,2014,balance for the PBO and the service cost for the year ended December 31,2014,were

International accounting standards for pensions currently in effect

On January 1,2014,Reds Corporation adopted a defined benefit pension plan.The plan's service cost of $140,000 was fully funded at the end of 2014.Prior service cost was funded by a contribution of $50,000 in 2014.Amortization of prior service cost was $14,000 for 2014.What is the amount of Reds' prepaid pension cost at December 31,2014?

Total pension expense recognized over the life of a pension plan will be

As an incentive,Sport Enterprises awards an annual bonus to its branch managers.This year,the bonus for the Bridgeport 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 Bridgeport branch before the deductions for the bonus and the income taxes.

Which of the following is NOT correct?

Blue Ice Inc.compensates its employees for certain absences.Employees can receive one day vacation plus one day sick leave for each month worked during the year.Unused vacation days may be carried forward,but unused sick leave expires within the year of employment.Employees are compensated according to their current pay rate.The following data were taken from the records for the year 2014. Compute the amount that should be reported as a liability for compensated absences on December 31,2014.

Valve Corporation has the following pension information for the year ended December 31,2014: Assuming the expected return on plan assets and the settlement rate are both 10 percent,what amount should Valve report for pension expense for 2014?

Quinn Company has a defined benefit plan.The fair value of plan assets on January 1,2014,was $1,500,000.No unrecognized net loss or gain existed.On December 31,2014,the fair value of the plan assets was $1,860,000.Benefits paid to retirees equaled $300,000.Company contributions to the plan totaled $360,000.The settlement rate was 8 percent,and the expected long-term rate of return on plan assets was 10 percent.The actual return on plan assets was

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

Accutron 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: 1.What was the Accutron's contribution to the pension fund for 2014? 2.What might have caused the change from an unrecognized net loss in 2013 to an unrecognized net gain in 2014?

The projected benefit obligation is the actuarial present value of the benefits attributed to employee service rendered to date.The projected benefit obligation is based on the present value of vested and nonvested benefits accrued to date using employees' future salary levels. Identify arguments that can be advanced for and against the use of the projected benefit obligation concept in accounting for pensions.

Sundance Communications is considering adopting a bonus plan for its executives.Two plans are currently being evaluated.The first plan involves executives receiving a bonus of 8 percent of company earnings calculated on income after deduction for bonus but before deduction for income tax.The second plan involves a bonus of 12 percent calculated on income after deductions for both bonus and income tax.Income tax is 30 percent of income after bonus. If income before bonus and taxes for the year is estimated to be $100,000,which bonus plan would company executives prefer?

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

On January 1,2014,Bongle Co.amended its defined benefit plan resulting in an increase in the projected benefit obligation of $700,000.As of the date of the amendment,Bongle Co.had 100 employees.Ten employees are expected to leave at the end of each of the next ten years.The minimum amount of amortization for prior service cost in 2015 (the second year)is

Pandora Company determined that it has an obligation relating to employees' rights to receive compensation for future absences attributable to employees services already rendered.The obligation relates to rights that vest,and payment of the compensation is probable.The amounts of Pandora's obligations as of December 31 are reasonably estimated as follows: In its December 31 balance sheet,what amount should Pandora report as its liability for compensated absences?

Which of the following components should be included in the calculation of net pension cost recognized for a period by an employer sponsoring a defined benefit pension plan?

Noser Inc.shows the following data relating to its pension plan for 2014: What amount should Noser report for pension expense in 2014?