Question 1

Eligibility for postretirement health care benefits usually is based on the employee's:

Accepted Answer

A) Job title. 
B) Number of years in the profession. 
C) Number of years in the current position. 
D) Age and/or years of service. 
A) Job title. 
B) Number of years in the profession. 
C) Number of years in the current position. 
D) Age and/or years of service.

Question 2

According to generally accepted accounting principles,accounting for postretirement benefits other than pensions must adhere to the:

Accepted Answer

A) Accrual basis of accounting. 
B) Cash basis of accounting. 
C) Modified accrual basis. 
D) Modified cash basis. 
A) Accrual basis of accounting. 
B) Cash basis of accounting. 
C) Modified accrual basis. 
D) Modified cash basis.

Question 3

Travis Transportation reported a net loss-AOCI in last year's balance sheet.This year,the company revised its estimate of future salary levels causing its PBO estimate to decline by $12.Also,the $24 million actual return on plan assets was less than the $27 million expected return.
Required:
1)Prepare the appropriate journal entries to record the gain and loss.
2)How do this gain and loss affect Travis' income statement,statement of comprehensive income,and balance sheet?

Accepted Answer

@#IMG-DLM& 
2)Income statement:Pension gains and l

Question 4

The projected benefit obligation may be less reliable than the accumulated benefit obligation.

Accepted Answer

A) True 
 B)False

Question 5

A company's postretirement health care benefit plan had an APBO of $265,000 on January 1,2016.During 2016,retiree benefits paid were $40,000.The discount rate for the plan for this year was 10%.Service cost for 2016 was $80,000.Plan assets (fair value)increased during the year by $45,000.The amount of the APBO at December 31,2016,was:

Accepted Answer

A) $225,000. 
B) $305,000. 
C) $331,500. 
D) $371,500. 
A) $225,000. 
B) $305,000. 
C) $331,500. 
D) $371,500.

Question 6

Interest cost will:

Accepted Answer

A) Increase the PBO and increase pension expense. 
B) Increase pension expense and reduce plan assets. 
C) Increase the PBO and reduce plan assets. 
D) Increase pension expense and reduce the return on plan assets. 
A) Increase the PBO and increase pension expense. 
B) Increase pension expense and reduce plan assets. 
C) Increase the PBO and reduce plan assets. 
D) Increase pension expense and reduce the return on plan assets.

Question 7

What is the theoretical and practical trade-off when measuring the pension liability using the projected benefit obligation compared to the accumulated benefit obligation?

Accepted Answer

The PBO uses projected future compensati

Question 8

Lasagna Corporation has a defined benefit pension plan.Lasagna 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 Lasagna Corporation'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 Lasagna Corporation has a defined benefit pension...

Question 9

Pension data for Sam Adams Inc.include the following for the current calendar year:
Discount rate,8%
Expected return on plan assets,10%
Actual return on plan assets,9%
Service cost,$400,000
   
Required:
1)Determine pension expense for the year.
2)Prepare the journal entries to record pension expense and funding for the year.

Accepted Answer

The answer of Pension data for Sam Adams Inc.include the...

Question 10

DeAngelo Yards,Inc. ,calculated pension expense for its underfunded pension plan as follows:   
Required:
Which elements of DeAngelo's balance sheet are affected by the components of pension expense? What are the specific changes in these accounts?

Accepted Answer

In the balance sheet,the net pension lia

Question 11

Discuss income smoothing as the term relates to pension plans.

Accepted Answer

Gains and losses can occur when either t

Question 12

The component of pension expense that results from amending a pension plan to give recognition to previous service of currently enrolled employees is the amortization of:

Accepted Answer

A) Prior service costs. 
B) Amendment costs. 
C) Retiree service costs. 
D) Transition costs. 
A) Prior service costs. 
B) Amendment costs. 
C) Retiree service costs. 
D) Transition costs.

Question 13

At December 31,2015,Mongo,Inc. ,reported in its balance sheet a net loss of $3 million related to its pension plan.The actuary for Mongo at the end of 2016 increased her estimate of future salary levels.Mongo's entry to record the effect of this change will include:

Accepted Answer

A) A debit to loss-OCI and a credit to PBO. 
B) A debit to PBO and a credit to loss-OCI. 
C) A debit to pension expense and a credit to PBO. 
D) A debit to pension expense and a credit to loss-OCI. 
A) A debit to loss-OCI and a credit to PBO. 
B) A debit to PBO and a credit to loss-OCI. 
C) A debit to pension expense and a credit to PBO. 
D) A debit to pension expense and a credit to loss-OCI.

Question 14

Pension data for Matta Corporation include the following for the current calendar year:   
Required:
Assuming no change in actuarial assumptions and estimates,determine the service cost component of pension expense for the current year.

Accepted Answer

@#IMG-DLM& 
Service

Question 15

Mars Inc.has a defined benefit pension plan.On December 31 (the end of the fiscal year),the company received the PBO report from the actuary.The following information was included in the report: ending PBO,$110,000;benefits paid to retirees,$10,000;interest cost,$7,200.The discount rate applied by the actuary was 8%.What was the beginning PBO?

Accepted Answer

A) $ 90,000. 
B) $100,000. 
C) $107,200. 
D) $112,000. 
A) $ 90,000. 
B) $100,000. 
C) $107,200. 
D) $112,000.

Question 16

What is Havana's 2016 actual return on plan assets?

Accepted Answer

A) $504 thousand. 
B) $618 thousand. 
C) $1,128 thousand. 
D) None of these answer choices is correct. 
A) $504 thousand. 
B) $618 thousand. 
C) $1,128 thousand. 
D) None of these answer choices is correct.

Eligibility for postretirement health care benefits usually is based on the employee's:

According to generally accepted accounting principles,accounting for postretirement benefits other than pensions must adhere to the:

The projected benefit obligation may be less reliable than the accumulated benefit obligation.

Interest cost will:

What is the theoretical and practical trade-off when measuring the pension liability using the projected benefit obligation compared to the accumulated benefit obligation?

DeAngelo Yards,Inc. ,calculated pension expense for its underfunded pension plan as follows: Required: Which elements of DeAngelo's balance sheet are affected by the components of pension expense? What are the specific changes in these accounts?

Discuss income smoothing as the term relates to pension plans.

The component of pension expense that results from amending a pension plan to give recognition to previous service of currently enrolled employees is the amortization of:

At December 31,2015,Mongo,Inc. ,reported in its balance sheet a net loss of $3 million related to its pension plan.The actuary for Mongo at the end of 2016 increased her estimate of future salary levels.Mongo's entry to record the effect of this change will include:

Pension data for Matta Corporation include the following for the current calendar year: Required: Assuming no change in actuarial assumptions and estimates,determine the service cost component of pension expense for the current year.

What is Havana's 2016 actual return on 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

Eligibility for postretirement health care benefits usually is based on the employee's:

According to generally accepted accounting principles,accounting for postretirement benefits other than pensions must adhere to the:

The projected benefit obligation may be less reliable than the accumulated benefit obligation.

Interest cost will:

What is the theoretical and practical trade-off when measuring the pension liability using the projected benefit obligation compared to the accumulated benefit obligation?

DeAngelo Yards,Inc. ,calculated pension expense for its underfunded pension plan as follows: Required: Which elements of DeAngelo's balance sheet are affected by the components of pension expense? What are the specific changes in these accounts?

Discuss income smoothing as the term relates to pension plans.

The component of pension expense that results from amending a pension plan to give recognition to previous service of currently enrolled employees is the amortization of:

At December 31,2015,Mongo,Inc. ,reported in its balance sheet a net loss of $3 million related to its pension plan.The actuary for Mongo at the end of 2016 increased her estimate of future salary levels.Mongo's entry to record the effect of this change will include:

Pension data for Matta Corporation include the following for the current calendar year: Required: Assuming no change in actuarial assumptions and estimates,determine the service cost component of pension expense for the current year.

What is Havana's 2016 actual return on 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