ACCT 557 Quiz 3 Perfect A+ Answer

ACCT 557 Quiz 3 Perfect A+ Answer

1. (TCO C) Presented below is pension information related to Woods, Inc. for the year 2013.
Service cost $76,000
Interest on projected benefit obligation $47,000
Interest on vested benefits $24,000
Amortization of prior service cost due to increase in benefits $12,000
Expected return on plan assets $18,000

The amount of pension expense to be reported for 2013 is

2. (TCO C) A pension liability is reported when

3. (TCO C) Which of the below listed items is NOT required for post-retirement benefit disclosures based on professional pronouncements?

4. (TCO C) Kathy’s Kittens, Inc. has provided the following information for their post-retirement benefits plan for 2013.
Service cost $475,000
Discount rate 8%
APBO, January 1, 2013 $3,800,000
EPBO, January 1, 2013 $4,100,000
Average remaining service to full eligibility 20 years
Average remaining service to expected retirement 25 years

The amount of post-retirement expense for 2013 is

5. (TCO C) On January 1, 2013, Laura’s Living Company has the following defined benefit pension plan balances.
Projected benefit obligation
$5,700,000
Fair value of plan assets
7,200,000
The interest (settlement) rate applicable to the plan is 10%. On January 1, 2014, the company amends its pension agreement so that service costs of $350,000 are created. Other data related to the pension plan are as follows.
2013
2014
Service costs
$150,000
$165,000
Prior service costs amortization
$0
$63,000
Contributions (funding) to the plan
$168,000
$194,000
Benefits paid
$190,000
$220,000
Actual return on plan assets
$576,000
$498,000
Expected rate of return on assets
8%
7%
Required:
(a) Prepare a pension worksheet for the pension plan for 2013 and 2014.
(b) For 2014, prepare the journal entry to record pension-related amounts.

6. (TCO C) Kasper, Inc. sponsors a defined-benefit pension plan. The following data relates to the operation of the plan for the year 2013.

Service cost $260,000
Contributions to the plan $250,000
Actual return on plan assets $240,000
Projected benefit obligation (beginning of year) $2,700,000
Fair value of plan assets (beginning of year) $2,900,000

The expected return on plan assets and the settlement rate were both 9%. The amount of pension expense reported for 2013 is

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