Question 1

What was the actuary's interest (discount)rate?

Accepted Answer

A) 7%. 
B) 8%. 
C) 9%. 
D) 10%. 
A) 7%. 
B) 8%. 
C) 9%. 
D) 10%. A

Question 2

Carolina Consulting Company has a defined benefit pension plan.The following pension-related data were available for the current calendar year:
   
There were no other relevant data.
Required:
1)Calculate the 2016 pension expense.Show calculations.
2)Prepare the 2016 journal entries to record pension expense and funding.
3)Prepare any journal entries to record any 2016 gains or losses.

Accepted Answer

The answer of Carolina Consulting Company has a defined benefit...

Question 3

Listed below are five terms followed by a list of phrases that describe or characterize each of the terms.Match each phrase with the number for the most correct term.

Accepted Answer

The answer of Listed below are five terms followed by...

Question 4

With respect to Ralph,what is the interest cost to be included in Oregon's 2017 postretirement benefit expense,rounded to the nearest dollar?

Accepted Answer

A) $7,802. 
B) $7,877. 
C) $8,766. 
D) None of these answer choices is correct. 
A) $7,802. 
B) $7,877. 
C) $8,766. 
D) None of these answer choices is correct.

Question 5

Which of the following is not a way of measuring the pension obligation?

Accepted Answer

A) Accumulated benefit obligation. 
B) Vested benefit obligation. 
C) Retiree benefit obligation. 
D) Projected benefit obligation. 
A) Accumulated benefit obligation. 
B) Vested benefit obligation. 
C) Retiree benefit obligation. 
D) Projected benefit obligation.

Question 6

With respect to Ralph,what is Oregon's expected postretirement benefit obligation (EPBO)at the end of 2016,rounded to the nearest dollar?

Accepted Answer

A) $137,045. 
B) $205,593. 
C) $246,810. 
D) $768,000. 
A) $137,045. 
B) $205,593. 
C) $246,810. 
D) $768,000.

Question 7

The attribution approach required by GAAP for postretirement health care plans is to assign:

Accepted Answer

A) An equal fraction of the EPBO to each year the employee is on the company payroll. 
B) An equal fraction of the APBO to each year the employee is on the company payroll. 
C) An equal fraction of the APBO to each year of service from the employee's hire date to the employee's full eligibility date. 
D) An equal fraction of the EPBO to each year of service from the employee's hire date to the employee's full eligibility date. 
A) An equal fraction of the EPBO to each year the employee is on the company payroll. 
B) An equal fraction of the APBO to each year the employee is on the company payroll. 
C) An equal fraction of the APBO to each year of service from the employee's hire date to the employee's full eligibility date. 
D) An equal fraction of the EPBO to each year of service from the employee's hire date to the employee's full eligibility date.

Question 8

Data pertaining to the postretirement health care benefit plan of Amazing Delivery Service include the following for the current calendar year:
   
Required:
1)Determine Amazing's postretirement benefit expense for the current year.
2)Prepare the journal entry to record the benefit expense for the current year.

Accepted Answer

The answer of Data pertaining to the postretirement health care...

Question 9

Use the following to answer questions 
The following incomplete (columns have missing amounts)pension spreadsheet is for Old Tucson Corporation (OTC).
  
-What is OTC's pension expense for the year?

Accepted Answer

A) $78. 
B) $72. 
C) $66. 
D) $18. 
A) $78. 
B) $72. 
C) $66. 
D) $18.

Question 10

Hart Corporation has an unfunded postretirement health care benefit plan.Life insurance and medical care benefits are provided to employees who render 12 years of service and attain age 55 while in service to the company.At the end of 2016,John Sousa is 35.He was hired by Hart five years ago at age 30 and is expected to retire at the age of 62.The expected postretirement benefit obligation for John is $50,000 at the end of 2016.
Required:
Calculate the accumulated postretirement benefit obligation at the end of 2016 and the service cost for 2016 pertaining to John.

Accepted Answer

APBO:$50,000 x 5/25 = $10,000

Question 11

The PBO is increased by:

Accepted Answer

A) An increase in the average life expectancy of employees. 
B) Amortization of prior service cost. 
C) An increase in the actuary's assumed discount rate. 
D) A return on plan assets that is lower than expected. 
A) An increase in the average life expectancy of employees. 
B) Amortization of prior service cost. 
C) An increase in the actuary's assumed discount rate. 
D) A return on plan assets that is lower than expected.

Question 12

Use the following to answer questions 
The following data are for Guava Company's retiree health care plan for the current calendar year.
  
-What is the correct entry to record postretirement benefit expense for the current year?

Accepted Answer

A)   
B)   
C)   
D)   
A)   
B)   
C)   
D)

Question 13

Burrito Corporation has a defined benefit pension plan.Burrito received the following information for the current calendar year:
   
The expected long-term return on plan assets is 10%.There were no other relevant data for the year.
Required:
1)Determine Burrito's pension expense for the year.
2)Prepare the journal entries to record the pension expense and funding for the year.

Accepted Answer

The answer of Burrito Corporation has a defined benefit pension...

Question 14

Pension plans typically require some minimum period of employment before benefits vest.What is the 1974 federal law governing vesting (as well as other aspects of pensions)? What are the vesting rules?

Accepted Answer

The Employee Retirement Income Security

Question 15

Amortizing prior service cost for pensions and other postretirement benefit plans will:

Accepted Answer

A) Decrease retained earnings. 
B) Increase assets. 
C) Decrease assets. 
D) Decrease shareholders' equity. 
A) Decrease retained earnings. 
B) Increase assets. 
C) Decrease assets. 
D) Decrease shareholders' equity.

Question 16

The three components of pension expense that are present most often are:

Accepted Answer

A) Service cost,prior service cost,and gain on plan assets. 
B) Service cost,interest cost,and gain from revisions in pension liability. 
C) Service cost,contribution cost,and prior service cost. 
D) Service cost,interest cost,and expected return on plan assets. 
A) Service cost,prior service cost,and gain on plan assets. 
B) Service cost,interest cost,and gain from revisions in pension liability. 
C) Service cost,contribution cost,and prior service cost. 
D) Service cost,interest cost,and expected return on plan assets.

Question 17

Listed below are six terms followed by a list of phrases that describe or characterize each of the terms.Match each phrase with the number for the most correct term.

Accepted Answer

The answer of Listed below are six terms followed by...

Question 18

The amortization of a net gain has what effect on pension expense?

Accepted Answer

A) Decreases it. 
B) Has no effect on it. 
C) Increases it (but only by the amount over 10% of the PBO). 
D) Increases it (regardless of the amount). 
A) Decreases it. 
B) Has no effect on it. 
C) Increases it (but only by the amount over 10% of the PBO). 
D) Increases it (regardless of the amount).

Question 19

A net pension asset is the excess of the projected benefit obligation over the plan assets.

Accepted Answer

A) True 
 B)False

Question 20

On January 1,2016,Tom's Transport Company's accumulated postretirement benefit obligation was $30,000,000.At the end of 2016,retiree benefits paid were $3,500,000.Service cost for 2016 is $6,000,000.At the end of 2016,there was no prior service cost or net gain or loss.Assumptions regarding the trend of future health care costs were revised at the end of 2016.This revision caused the actuary to revise downward the estimate of the APBO by $500,000.The appropriate discount rate was 6%.
Required:
Determine the amount of the accumulated postretirement benefit obligation at December 31,2016.

Accepted Answer

The answer of On January 1,2016,Tom's Transport Company's accumulated postretirement...

What was the actuary's interest (discount)rate?

Listed below are five terms followed by a list of phrases that describe or characterize each of the terms.Match each phrase with the number for the most correct term.

With respect to Ralph,what is the interest cost to be included in Oregon's 2017 postretirement benefit expense,rounded to the nearest dollar?

Which of the following is not a way of measuring the pension obligation?

With respect to Ralph,what is Oregon's expected postretirement benefit obligation (EPBO)at the end of 2016,rounded to the nearest dollar?

The attribution approach required by GAAP for postretirement health care plans is to assign:

Use the following to answer questions The following incomplete (columns have missing amounts)pension spreadsheet is for Old Tucson Corporation (OTC). -What is OTC's pension expense for the year?

The PBO is increased by:

Use the following to answer questions The following data are for Guava Company's retiree health care plan for the current calendar year. -What is the correct entry to record postretirement benefit expense for the current year?

Pension plans typically require some minimum period of employment before benefits vest.What is the 1974 federal law governing vesting (as well as other aspects of pensions)? What are the vesting rules?

Amortizing prior service cost for pensions and other postretirement benefit plans will:

The three components of pension expense that are present most often are:

Listed below are six terms followed by a list of phrases that describe or characterize each of the terms.Match each phrase with the number for the most correct term.

The amortization of a net gain has what effect on pension expense?

A net pension asset is the excess of the projected benefit obligation over the plan assets.

Environment and Theoretical Structure of Financial Accounting

Review of the Accounting Process

The Balance Sheet and Financial Disclosures

The Income Statement, comprehensive Income, and the Statement of Cash Flows

Income Measurement

Time Value of Money Concepts

Cash and Receivables

Inventories: Measurement

Inventories: Additional Issues

Property, plant, and Equipment and Intangible Assets: Acquisition and Disposition

Property, plant, and Equipment and Intangible Assets: Utilization and Impairment

Investments

Current Liabilities and Contingencies

Bonds and Long-Term Notes

Leases

Accounting for Income Taxes

Shareholders Equity

Share-Based Compensation and Earnings Per Share

Accounting Changes

The Statement of Cash Flows

Filters

Exam 17: Pensions and Other Postretirement Benefits

What was the actuary's interest (discount)rate?

Listed below are five terms followed by a list of phrases that describe or characterize each of the terms.Match each phrase with the number for the most correct term.

With respect to Ralph,what is the interest cost to be included in Oregon's 2017 postretirement benefit expense,rounded to the nearest dollar?

Which of the following is not a way of measuring the pension obligation?

With respect to Ralph,what is Oregon's expected postretirement benefit obligation (EPBO)at the end of 2016,rounded to the nearest dollar?

The attribution approach required by GAAP for postretirement health care plans is to assign:

Use the following to answer questions The following incomplete (columns have missing amounts)pension spreadsheet is for Old Tucson Corporation (OTC). -What is OTC's pension expense for the year?

The PBO is increased by:

Use the following to answer questions The following data are for Guava Company's retiree health care plan for the current calendar year. -What is the correct entry to record postretirement benefit expense for the current year?

Pension plans typically require some minimum period of employment before benefits vest.What is the 1974 federal law governing vesting (as well as other aspects of pensions)? What are the vesting rules?

Amortizing prior service cost for pensions and other postretirement benefit plans will:

The three components of pension expense that are present most often are:

Listed below are six terms followed by a list of phrases that describe or characterize each of the terms.Match each phrase with the number for the most correct term.

The amortization of a net gain has what effect on pension expense?

A net pension asset is the excess of the projected benefit obligation over the plan assets.

Environment and Theoretical Structure of Financial Accounting

Review of the Accounting Process

The Balance Sheet and Financial Disclosures

The Income Statement, comprehensive Income, and the Statement of Cash Flows

Income Measurement

Time Value of Money Concepts

Cash and Receivables

Inventories: Measurement

Inventories: Additional Issues

Property, plant, and Equipment and Intangible Assets: Acquisition and Disposition

Property, plant, and Equipment and Intangible Assets: Utilization and Impairment

Investments

Current Liabilities and Contingencies

Bonds and Long-Term Notes

Leases

Accounting for Income Taxes

Shareholders Equity

Share-Based Compensation and Earnings Per Share

Accounting Changes

The Statement of Cash Flows

Filters