Ask Question, Ask an Expert

+61-413 786 465

info@mywordsolution.com

Ask Accounting Basics Expert

Accounting


Home >> Accounting Basics

1. Sachs Brands' defined benefit pension plan specifies annual retirement benefits equal to: 1.6% * service years * final year's salary, payable at the end of each year. Angela Davenport was hired by Sachs at the beginning of 1999 and is expected to retire at the end of 2033 after 35 years' service. Her retirement is expected to span 18 years. Davenport's salary is $90,000 at the end of 2013 and the company's actuary projects her salary to be $240,000 at retirement. The actuary's discount rate is 7%.

a. Draw a time line that depicts Davenport's expected service period, retirement period, and a 2013 measurement date for the pension obligation. Service Period = 1997-2031 Retirement Years = 2031-2049 Measurement date= 2011

b. Estimate by the accumulated benefits approach the amount of Davenport's annual retirement payments earned as of the end of 2013. 1.6% * 15 * $90,000 = $21,600

c. What is the company's accumulated benefit obligation at the end of 2013 with respect to Davenport? The present value of the annuity as of the retirement date is: $21,600 * 10.05909 = 217,276 The ABO is the present value of the retirement benefits at the end of 2011: $217,276 * .25842 = $56,148

d. If no estimates are changed in the meantime, what will be the accumulated benefit obligation at the end of 2016 (three years later) when Davenport's salary is $100,000? 1.6% x 18 x $100,000 = $28,800 $28,800 x 10.05909 = $289,702 $289,702 x .31657 = $91,711

Accounting Basics, Accounting

  • Category:- Accounting Basics
  • Reference No.:- M91696378
  • Price:- $10

Priced at Now at $10, Verified Solution

Have any Question?


Related Questions in Accounting Basics

Question - nutty co gourmet snacks currently sells their

Question - Nutty Co. Gourmet Snacks currently sells their Gourmet Deluxe Gift Basket for 53% each. Nutty Co. currently holds 2B percent of the market share for high-end gift baskets. The marketing manager believes that t ...

Question - bridgeport company reports the following

Question - Bridgeport Company reports the following financial information before adjustments. Dr. Cr. Accounts Receivable $169,500 Allowance for Doubtful Accounts $2,060 Sales Revenue (all on credit) 841,800 Sales Return ...

Question - lie around furniture manufactures two products

Question - Lie Around Furniture manufactures two products: Futons and Recliners. The following data are available: Futons Recliners Sales price $ 530.00 $ 710.00 Variable costs $ 380.00 $ 405.00 The company can manufactu ...

Question - jimeniz enterprises issued 9 5-year 2600000 par

Question - Jimeniz Enterprises issued 9%, 5-year, $2,600,000 par value bonds that pay interest semiannually on September 1 and March 1. The bonds are dated September 1, 2014, and are issued on that date. The market rate ...

Question - who pays the first level of tax on a c

Question - Who pays the first level of tax on a C corporation's income? What is the tax rate applicable to the first level of tax? Did recent tax law changes increase or decrease the corporate tax rate? under new taxatio ...

Questions -question 1 - on 20 september 2005 louisa paid

Questions - Question 1 - On 20 September 2005 Louisa paid $500,000 for an investment property and incurred the following costs: In October 2005 stamp duty and legal costs on acquisition $25,000 In June 2010 Louisa added ...

Accounting question - in 1990 flounder company completed

Accounting Question - In 1990, Flounder Company completed the construction of a building at a cost of $2,300,000 and first occupied it in January 1991. It was estimated that the building will have a useful life of 40 yea ...

Question reflect back on what you have learned in this

Question: Reflect back on what you have learned in this course about how to construct high-quality arguments for positions. Give an example of how the ability to think logically and to construct good arguments could help ...

Question decision making with managerial accountingdue to

Question: Decision Making with Managerial Accounting Due to varying business characteristics, the managerial accounting techniques applied in each business may differ. For example, a business in the start-up phase may re ...

Question - metlock corporation traded a used truck cost

Question - Metlock Corporation traded a used truck (cost $28,400, accumulated depreciation $25,560) for a small computer with a fair value of $4,686. Metlock also paid $710 in the transaction. Calculate the journal entry ...

  • 4,153,160 Questions Asked
  • 13,132 Experts
  • 2,558,936 Questions Answered

Ask Experts for help!!

Looking for Assignment Help?

Start excelling in your Courses, Get help with Assignment

Write us your full requirement for evaluation and you will receive response within 20 minutes turnaround time.

Ask Now Help with Problems, Get a Best Answer

Why might a bank avoid the use of interest rate swaps even

Why might a bank avoid the use of interest rate swaps, even when the institution is exposed to significant interest rate

Describe the difference between zero coupon bonds and

Describe the difference between zero coupon bonds and coupon bonds. Under what conditions will a coupon bond sell at a p

Compute the present value of an annuity of 880 per year

Compute the present value of an annuity of $ 880 per year for 16 years, given a discount rate of 6 percent per annum. As

Compute the present value of an 1150 payment made in ten

Compute the present value of an $1,150 payment made in ten years when the discount rate is 12 percent. (Do not round int

Compute the present value of an annuity of 699 per year

Compute the present value of an annuity of $ 699 per year for 19 years, given a discount rate of 6 percent per annum. As

Follow Us

© Copyright 2013-14 mywordsolution.com All rights reserved