FiltersDone

Question type

Essay

Multiple Choice

Short Answer

True False

Matching

Exam 17: Pensions and Other Postretirement Benefits

Show Answer

Share

---

All types

Filters

Study FlashcardsPractice ExamLearn

Question 81

Multiple Choice

Review LaterAdd Note

Review Later

Amortizing prior service cost for pension plans will:

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.

Correct Answer

verified

Show Answer

Question 82

Multiple Choice

Review LaterAdd Note

Review Later

Accounting for postretirement health care benefits is similar, in most respects, to accounting for:

A) Payroll taxes.
B) Health insurance costs for current employees.
C) Pension benefits.
D) Sick pay and vacation pay.

Correct Answer

verified

Show Answer

Question 83

Multiple Choice

Review LaterAdd Note

Compared to the ABO, the PBO usually is:

A company's postretirement health care benefit plan had an APBO of $265,000 on January 1, 2013. During 2013, retiree benefits paid were $40,000. The discount rate for the plan for this year was 10%. Service cost for 2013 was $80,000. Plan assets (fair value) increased during the year by $45,000. The amount of the APBO at December 31, 2013, was:

Which of the following is not a way of measuring the pension obligation?

Pension expense is decreased by:

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

Careful Consulting Company has an unfunded postretirement benefit plan. On December 31, 2013, the following data were available concerning changes in the plan's accumulated postretirement benefit obligation with respect to one of Careful's employees: Required: 1) Over how many years is the expected postretirement benefit obligation being expensed? 2) What is the expected postretirement benefit obligation at the end of 2013? 3) When was the employee hired? 4) What is the expected postretirement benefit obligation at the beginning of 2013?

Actuary and trustee reports indicate the following changes in the PBO and plan assets of Reeves Uniforms during 2013: Required: 1. Determine Reeves' pension expense for 2013 and prepare the appropriate journal entries to record the expense as well as the cash contribution to plan assets. 2. Determine the new gains and/or losses in 2013 and prepare the appropriate journal entry to record them. 3. Prepare a pension spreadsheet to assist you in determining end of 2013 balances in the PBO, plan assets, prior service cost, the net loss-AOCI, and the pension liability-AOCI.

Compared to the ABO, the PBO usually is:

With respect to Ralph, what is Oregon's expected postretirement benefit obligation (EPBO) at the end of 2013, rounded to the nearest dollar?

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?

What were the retiree benefits paid?

Pension gains related to plan assets occur when:

Burrito Corporation has a defined benefit pension plan. Burrito 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 Burrito's pension expense for the year. 2) Prepare the journal entries to record the pension expense and funding for the year.

Reporting actuarial gains and losses among OCI items in the statement of comprehensive income also is required under IAS No. 19, referred to as remeasurement gains and losses. Under IAS No. 19 they are not subsequently amortized to expense and recycled or reclassified from other comprehensive income as is required under U.S. GAAP (if the net gain or net loss exceeds the 10% threshold). So, the entry might be identical to the one in question 2 except we call it a "remeasurement" loss and the projected benefit obligation is called the defined benefit obligation (DBO):

In its 2013 annual report to shareholders, Marianne James Companies Inc. (MJCI) disclosed the following information regarding its postemployment benefit plans: The Company and certain of its affiliates sponsor postemployment benefit plans covering substantially all salaried and certain hourly employees. The cost of these plans is charged to expense over the working life of the covered employees. Net postemployment costs consisted of the following for the years ended December 31, 2013, 2012, and 2011: The company instituted workforce reduction programs in its North American food operations in 2011. These actions resulted in incremental postemployment costs, which are shown as other expense above. Required: Describe the three components in the net postemployment costs disclosed by MJCI.

Prior service cost is included among OCI items in the statement of comprehensive income and thus subsequently becomes part of AOCI where it is amortized over the average remaining service period using

A net gain or net loss affects pension expense only if it exceeds 10% of the pension benefit obligation or 10% of plan assets, whichever is lower.

Consider the following: I. Present value of vested benefits at present pay levels. II) Present value of nonvested benefits at present pay levels. III) Present value of additional benefits related to projected pay increases. Which of the above constitutes the projected benefit obligation?