Question 1

ERISA made major changes in the requirements for pension plan:

Accepted Answer

A)  Vesting. 
B)  Reporting. 
C)  Taxing. 
D)  Investing. 
A)  Vesting. 
B)  Reporting. 
C)  Taxing. 
D)  Investing.

Question 2

Open Arms Industries has a noncontributory, defined benefit pension plan. During 2018, changing economic conditions caused the actuary to increase the assumed rate of salary progression.
Required:
1. Does the change create a gain or does it create a loss for Open Arms? Why?
2. Assuming the magnitude of the change is $7 million. Prepare the appropriate journal entry to record any 2018 gain or loss. (Ignore income taxes.) If Open Arms prepares its financial statements according to U.S. GAAP, how will the company report the gain or loss?
3. Would your response to question 2 differ if Open Arms prepares its financial statements according to International Financial Reporting Standards (IFRS)?

Accepted Answer

1. An increase in the assumed rate of sa

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 most correct term.
-Projected benefit obligation

Accepted Answer

A) Future compensation levels estimated. 
B) Not contingent on continued employment. 
C) Gain from revised expectation of return plan assets. 
D) Increased by employer contributions. 
E) Excess over 10% of the larger of plan assets or PBO. 
A) Future compensation levels estimated. 
B) Not contingent on continued employment. 
C) Gain from revised expectation of return plan assets. 
D) Increased by employer contributions. 
E) Excess over 10% of the larger of plan assets or PBO.

Question 4

Gains and losses can occur with pension plans when:

Accepted Answer

A)  Either the PBO or the return on plan assets turns out to be different than expected. 
B)  Either the ABO or the return on plan assets turns out to be different than expected. 
C)  Either the PBO, the ABO, or the return on plan assets turns out to be different than expected. 
D)  Either the PBO or the ABO turns out to be different than expected. 
A)  Either the PBO or the return on plan assets turns out to be different than expected. 
B)  Either the ABO or the return on plan assets turns out to be different than expected. 
C)  Either the PBO, the ABO, or the return on plan assets turns out to be different than expected. 
D)  Either the PBO or the ABO turns out to be different than expected.

Question 5

The following incomplete (columns have missing amounts) pension spreadsheet is for Old Tucson Corporation (OTC).   
-What was the balance of the net pension asset/liability reported in the balance sheet at the end of the previous year?

Accepted Answer

A)  Net pension asset of $250 millions. 
B)  Net pension asset of $442 millions. 
C)  Net pension liability of $250 millions. 
D)  Net pension liability of $442 millions. 
A)  Net pension asset of $250 millions. 
B)  Net pension asset of $442 millions. 
C)  Net pension liability of $250 millions. 
D)  Net pension liability of $442 millions.

Question 6

Amortizing a net loss for pensions will:

Accepted Answer

A)  Increase retained earnings and increase accumulated other comprehensive income. 
B)  Decrease retained earnings and decrease accumulated other comprehensive income. 
C)  Increase retained earnings and decrease accumulated other comprehensive income. 
D)  Decrease retained earnings and increase accumulated other comprehensive income. 
A)  Increase retained earnings and increase accumulated other comprehensive income. 
B)  Decrease retained earnings and decrease accumulated other comprehensive income. 
C)  Increase retained earnings and decrease accumulated other comprehensive income. 
D)  Decrease retained earnings and increase accumulated other comprehensive income.

ERISA made major changes in the requirements for pension plan:

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

Gains and losses can occur with pension plans when:

The following incomplete (columns have missing amounts) pension spreadsheet is for Old Tucson Corporation (OTC). -What was the balance of the net pension asset/liability reported in the balance sheet at the end of the previous year?

Amortizing a net loss for pensions will:

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

Revenue Recognition

Time Value of Money Concepts

Cash and Receivables

Inventories: Measurement

Inventories: Additional Issues

Property, Plant, and Equipment and Intangible Assets: Acquisition

Property, Plant, and Equipment and Intangible Assets: Utilization and Disposition

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 and Error Corrections

The Statement of Cash Flows Revisited

Filters

Exam 17: Pensions and Other Postretirement Benefits

ERISA made major changes in the requirements for pension plan:

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

Gains and losses can occur with pension plans when:

The following incomplete (columns have missing amounts) pension spreadsheet is for Old Tucson Corporation (OTC). -What was the balance of the net pension asset/liability reported in the balance sheet at the end of the previous year?

Amortizing a net loss for pensions will:

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

Revenue Recognition

Time Value of Money Concepts

Cash and Receivables

Inventories: Measurement

Inventories: Additional Issues

Property, Plant, and Equipment and Intangible Assets: Acquisition

Property, Plant, and Equipment and Intangible Assets: Utilization and Disposition

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 and Error Corrections

The Statement of Cash Flows Revisited

Filters