Exam 17: Pensions and Other Postretirement Benefits

The net postretirement benefit liability (APBO minus plan assets)is increased by:

Use the following to answer questions In its 2016 annual report to shareholders,JDS Corporation disclosed the following information about its pension plan: The increase in the underfunded projected benefit obligation was primarily attributable to a reduction in the assumed discount rate.This was combined with the effect of increases in benefits under the terms of the plan in excess of current inflation rates.The net result was reflected as a reduction in accumulated other comprehensive income. -Why did the loss result in a reduction in accumulated other comprehensive income?

With pensions,service cost reflects additional benefits employees earn from an additional year's service.The service cost for retiree health care plans is:

The following information relates to Hatami Company's defined benefit pension plan during the current reporting year: Required: Determine the balance of pension plan assets at fair value on December 31.

The amount of the vested benefit obligation is less than the projected benefit obligation and more than the accumulated benefit obligation.

Scallion Company received the following reports of its defined benefit pension plan for the current calendar year: The long-term expected rate of return on plan assets is 10%.Assuming no other data are relevant,what is the pension expense for the year?

Compared to the ABO,the PBO usually is:

The accounting for defined contribution pension plans is easy because each year:

Vrable Corporation has a defined benefit pension plan.Two alternative possibilities for pension-related data for the current calendar year are shown below: Required: For each independent case,calculate amortization of the net loss or gain that should be included as a component of pension expense for the current year.

Lender Company provides postretirement health care benefits to employees who provide at least 10 years of service and reach the age of 65 while in service.On January 1 of the current calendar year,the following plan-related data were available. On January 1 of the current year,Lender amends the plan to provide dental benefits.The actuary determines that the cost of making the amendment increases the APBO by $20,000,000.Management chooses to amortize this amount on a straight-line basis.The service cost is $40,000,000.The appropriate interest rate is 10%. Required: Calculate the postretirement benefit expense for the current year.

Orpheum Productions has a noncontributory,defined benefit pension plan.On December 31,2016 (the end of Orpheum's fiscal year),the following pension-related data were available: Required: 1)Prepare the 2016 journal entry to record pension expense. 2)Prepare the 2016 journal entry to record the contribution to plan assets. 3)Prepare the journal entries to record any 2016 gains and losses.

Discuss the key quantitative elements of accounting for a defined benefit pension plan.

The estimated medical costs are expected to be $7,500 during an employee's retirement.The retiree is expected to pay 30% of the cost and Medicare is expected to pay 50% of the cost.What is the company's estimated net cost of benefits?

Pension data for the Ben Franklin Company 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,$200,000 Required: 1)Determine pension expense for the year. 2)Prepare the journal entries to record pension expense and funding for the year.

What was the net pension asset / liability reported in the balance sheet at the end of the year?

The following is an incomplete pension spreadsheet for the current year for Swiss Mist Corporation. Required: 1)Complete the pension spreadsheet. 2)Prepare the journal entry to record pension expense for the year.

Pension benefits and postretirement health benefits typically are similar in their:

Which of the following is not a requirement for a qualified pension plan?

Assume that at the beginning of the current year,a company has a net gain-AOCI of $60,000,000.At the same time,assume the PBO and the plan assets are $300,000,000 and $450,000,000,respectively.The average remaining service period for the employees expected to receive benefits is 10 years.What is the amount of amortization to pension expense for the year?

How do U.S.GAAP and IFRS differ with regard to reporting prior service costs.