Question 1

The components of net periodic pension expense that involve delayed recognition are

Accepted Answer

A)   gains and losses,transition cost,and prior service cost.
B)   service cost,transition cost,and gains and losses.
C)   interest cost,prior service cost,transition cost,and expected return on plan assets.
D)   transition cost,prior service cost,and expected return on plan assets. A

Question 2

Which of the following is not an issue in accounting for defined benefit plans?

Accepted Answer

A)   The amount of pension expense to be recognized
B)   The amount of pension liability to be reported
C)   The amount of funding (contributions) required by the plan
D)   Disclosures needed to supplement the financial statements C

Question 3

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

Accepted Answer

A)   the same as the amount of the cash funding (including interest earned) .
B)   more than the amount of the cash funding (including interest earned) .
C)   less than the amount of the cash funding (including interest earned) .
D)   the amount contributed over the life of the plan less the total actual return on plan assets. A

Question 4

Which of the following statements is correct?

Accepted Answer

A)   Minimum (corridor) amortization of net unrecognized gain or loss is not allowed for postretirement benefit plans.
B)   Immediate recognition of gains and losses is allowed for postretirement benefit plans but not for pension plans.
C)   Immediate recognition of gains and losses is allowed for pension plans but not for postretirement benefit plans.
D)   Minimum (corridor) amortization of net unrecognized gain or loss is the only amortization method allowed for postretirement benefit plans.

Question 5

During the first week of February,Gabe Hopen earned $300.Assume that FICA taxes are 7.65 percent of wages up to $106,800,state unemployment tax is 5.0 percent of wages up to $13,000,and federal unemployment tax is 0.8 percent of wages up to $13,000.Assume that Gabe has voluntary withholdings of $10 (in addition to taxes)and that federal and state income tax withholdings are $18 and $6,respectively.
-Using the information above,what amount is the check,net of all deductions,that Gabe received for the week's pay?

Accepted Answer

A)   $243.05
B)   $259.60
C)   $274.60
D)   $277.00

Question 6

Which of the following is not a post-employment benefit,according to FASB ASC Topic 712,"Employers' Accounting for Postemployment Benefits"?

Accepted Answer

A)   Salary continuation after severance
B)   Health insurance paid for a three-month period following a layoff
C)   Life insurance coverage paid for retirees
D)   Job training for laid-off workers

Question 7

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.

Accepted Answer

The answer of Feinberg,Inc. ,provides a noncontributory defined benefit plan...

Question 8

Using the information below,compute the gain or loss component of net periodic pension cost and indicate whether the amount is added or deducted in determining pension cost for the period.

Accepted Answer

The answer of Using the information below,compute the gain or...

Question 9

The following information relates to the defined benefit pension plan of the Bamberger Co.:

Accepted Answer

The answer of The following information relates to the defined...

Question 10

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

Accepted Answer

A)   $140,000.
B)   $127,273.
C)   $114,545.
D)   $101,818.

Question 11

Evasive Corporation pays its employees monthly.The following information is available for the January payroll:
  All employees' salaries are subject to the tax rates mentioned above for Evasive Corporation.
-Using the information above,Evasive's total expense related to the January payroll is

Accepted Answer

A)   $95,120
B)   $86,720
C)   $88,680
D)   $81,120

Question 12

Which of the following is not a component of net periodic pension cost?

Accepted Answer

A)   Interest cost
B)   Actual return on plan assets
C)   Benefits paid to retirees
D)   Amortization of prior service cost

Question 13

Evasive Corporation pays its employees monthly.The following information is available for the January payroll:
  All employees' salaries are subject to the tax rates mentioned above for Evasive Corporation.
-Using the information above,what was Evasive's liability relative to the January payroll after the employees received and cashed their payroll checks?

Accepted Answer

A)   $28,800
B)   $23,760
C)   $21,600
D)   $21,200

Question 14

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

Accepted Answer

A)   $206,000
B)   $238,000
C)   $242,000
D)   $270,000

Question 15

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? Actual Return Amortization of
On Plan Assets, Unrecognized Prior Interest
If Any Service cost,If Any Cost

Accepted Answer

A)   No No Yes
B)   Yes No Yes
C)   Yes Yes No
D)   Yes Yes Yes

Question 16

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?

Accepted Answer

A)   $36,000
B)   $60,000
C)   $84,000
D)   $90,000

Question 17

Vinny,Inc.has an incentive compensation plan under which the sales manager receives a bonus equal to 10 percent of the company's income after deductions for bonus and income taxes.Income before bonus and income taxes is $400,000.The effective income tax rate is 30 percent.How much is the bonus (rounded to the nearest dollar)?

Accepted Answer

A)   $40,000
B)   $30,108
C)   $28,000
D)   $26,168

Question 18

Which of the following is NOT correct?

Accepted Answer

A)   International accounting standards for pensions (IAS 19) do not include any provisions for the recognition of an additional minimum liability.
B)   International accounting standards for pensions (IAS 19) do not allow for the recognition of a net pension asset in some circumstances.
C)   International accounting standard for pensions (IAS 19) include the same 10% corridor amount in calculating the amortization of deferred gains and losses as found in U.S.GAAP.
D)   International accounting standards for pensions (IAS 19) recognized pension gains and losses immediately as part of comprehensive income.

Question 19

Records for the Bass Corporation's defined-benefit pension plan show a net unrecognized loss at December 31,2013,of $30,000,after recording the pension expense for 2013.The average expected service period of the company's employees is 10 years.The actuary notifies Bass's management that an actuarial gain of $4,000 is determined at January 1,2014.Actual return for 2014 is $2,000,and expected return is $3,000.The following information also is available for the 2014:  The minimum amortization of unrecognized loss increases 2014 pension expense by what amount?

Accepted Answer

A)   $2,400
B)   $1,700
C)   $2,100
D)   $2,600

Question 20

FASB ASC Topic 715 states that prior service cost should be

Accepted Answer

A)   offset against current service cost.
B)   recognized in the period of plan adoption or amendment.
C)   amortized over the expected service period.
D)   recorded as a prior period adjustment.

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