Question 1 - On January 1, 2011, Newlin Co. has the following balances:
|
Projected benefit obligation
|
$2,100,000
|
|
Fair value of plan assets
|
1,800,000
|
The settlement rate is 10%. Other data related to the pension plan for 2011 are:
|
Service cost
|
$180,000
|
|
Amortization of prior service costs due to increase in benefits
|
60,000
|
|
Contributions
|
300,000
|
|
Benefits paid
|
105,000
|
|
Actual return on plan assets
|
237,000
|
|
Amortization of net gain
|
18,000
|
The balance of the projected benefit obligation at December 31, 2011 is
$2,385,000.
$2,355,000.
$2,337,000.
$2,685,000.
Question 2 - Foster Corporation received the following report from its actuary at the end of the year:
|
December 31, 2010
|
December 31, 2011
|
|
Projected benefit obligation
|
$1,600,000
|
$1,800,000
|
|
Accumulated benefit obligation
|
1,300,000
|
1,480,000
|
|
Fair value of pension plan assets
|
1,380,000
|
1,440,000
|
The amount reported as the pension liability at December 31, 2010 is
$300,000.
$-0-.
$200,000.
$220,000.
Question 3 - Huggins Company has the following information at December 31, 2011 related to its pension plan:
|
Projected benefit obligation
|
$4,000,000
|
|
Accumulated benefit obligation
|
3,200,000
|
|
Plan assets (fair value)
|
4,200,000
|
|
Accumulated OCI (PSC)
|
300,000
|
The amount of pension asset / liability Huggins Company would recognize at December 31, 2011 is
Pension asset of $1,000,000.
Pension liability of $800,000.
Pension asset of $200,000.
Pension liability of $300,000.
Question 4 - The following information relates to the pension plan for the employees of Turner Co.:
|
1/1/10
|
12/31/10
|
12/31/11
|
|
Accum. benefit obligation
|
$5,280,000
|
$5,520,000
|
$7,200,000
|
|
Projected benefit obligation
|
5,580,000
|
5,976,000
|
8,004,000
|
|
Fair value of plan assets
|
5,100,000
|
6,240,000
|
6,888,000
|
|
AOCI - net (gain) or loss
|
-0-
|
(864,000)
|
(960,000)
|
|
Settlement rate (for year)
|
|
11%
|
11%
|
|
Expected rate of return (for year)
|
|
8%
|
7%
|
Turner estimates that the average remaining service life is 16 years. Turner's contribution was $756,000 in 2011 and benefits paid were $564,000.
The actual return on plan assets in 2011 is
$648,000.
$408,000.
$456,000.
$588,000.
Question 5 - Hubbard, Inc. received the following information from its pension plan trustee concerning the operation of the company's defined-benefit pension plan for the year ended December 31, 2011.
|
1/1/11
|
12/31/11
|
|
Projected benefit obligation
|
$11,400,000
|
$11,760,000
|
|
Pension assets (at fair value)
|
6,000,000
|
6,900,000
|
|
Accumulated benefit obligation
|
2,400,000
|
2,760,000
|
|
Net (gains) and losses
|
-0-
|
240,000
|
The service cost component of pension expense for 2011 is $840,000 and the amortization of prior service cost due to an increase in benefits is $180,000. The settlement rate is 10% and the expected rate of return is 8%. What is the amount of pension expense for 2011?
$1,680,000
$1,608,000
$1,440,000
$1,716,000
Question 6 - The following information relates to Jackson, Inc.:
|
For the Year Ended December 31,
|
|
2010
|
2011
|
|
Plan assets (at fair value)
|
$1,260,000
|
$1,824,000
|
|
Pension expense
|
570,000
|
450,000
|
|
Projected benefit obligation
|
1,620,000
|
1,884,000
|
|
Annual contribution to plan
|
600,000
|
450,000
|
|
Accumulated OCI (PSC)
|
480,000
|
420,000
|
The amount reported as the liability for pensions on the December 31, 2011 balance sheet is
$520,000.
$-0-.
$60,000.
$1,884,000.
Presented below is pension information related to Woods, Inc. for the year 2011:
|
Service cost
|
$72,000
|
|
Interest on projected benefit obligation
|
54,000
|
|
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 2011 is
$108,000.
$120,000.
$144,000.
$162,000.
Question 8 - Midland Company follows U.S. GAAP for its external financial reporting whereas Bailey Company follows iGAAP for its external financial reporting. The amount contributed by Midland for its defined contribution plan for 2011 amounted to $49,000 and the amount contributed by Bailey for its defined contribution plan for 2011 amounted to $76,000. The remaining service lives of employees at both firms is estimated to be 10 years. What is the amount of expense related to pension costs recognized by each company in its income statement for the year ended December 31, 2011?
Midland Bailey
$49,000 $76,000
$4,900 $7,600
$49,000 $7,600
$4,900 $76,000
Question 9 - On January 1, 2011, Newlin Co. has the following balances:
|
Projected benefit obligation
|
$2,100,000
|
|
Fair value of plan assets
|
1,800,000
|
The settlement rate is 10%. Other data related to the pension plan for 2011 are:
|
Service cost
|
$180,000
|
|
Amortization of prior service costs due to increase in benefits
|
60,000
|
|
Contributions
|
300,000
|
|
Benefits paid
|
105,000
|
|
Actual return on plan assets
|
237,000
|
|
Amortization of net gain
|
18,000
|
The balance of the projected benefit obligation at December 31, 2011 is
$2,685,000.
$2,385,000.
$2,337,000.
$2,355,000.
Question 10 - The following information for Cooper Enterprises is given below:
|
Assets and obligations
|
December 31, 2011
|
|
Plan assets (at fair value)
|
$100,000
|
|
Accumulated benefit obligation
|
185,000
|
|
Projected benefit obligation
|
200,000
|
|
|
|
|
Other Items
|
|
|
|
Pension asset / liability, January 1, 2011
|
5,000
|
|
|
Contributions
|
60,000
|
|
|
Accumulated other comprehensive loss
|
83,950
|
|
There were no actuarial gains or losses at January 1, 2011. The average remaining service life of employees is 10 years.
What is the pension expense that Cooper Enterprises should report for 2011?
$110,000
$83,950
$76,050
$60,000