Ma1. Assume the below information about a firm’s defined benefit pension plan: Pension Fund Beginning Balance Cash Funding by the Firm Actual Investment Income Payments to Retirees Ending Balance 2 + 5 - 15 42 Pension Obligation Beginning Balance Service Interest Payments to Retirees Changes in Assumptions Ending Balance 9 5 0 49 Expected investment income was greater than actual investment income by $5. What was the funded status of the pension plan at the beginning of the year? Select one: a. Underfunded by $15 b. Overfunded by $10 c. Fully funded d. Underfunded by $10

Ma1. Assume the below information about a firm’s defined benefit pension plan: Pension Fund Beginning Balance Cash Funding by the Firm Actual Investment Income Payments to Retirees Ending Balance 2 + 5 - 15 42 Pension Obligation Beginning Balance Service Interest Payments to Retirees Changes in Assumptions Ending Balance 9 5 0 49 Expected investment income was greater than actual investment income by $5. What was the funded status of the pension plan at the beginning of the year? Select one: a. Underfunded by $15 b. Overfunded by $10 c. Fully funded d. Underfunded by $10

Financial Reporting, Financial Statement Analysis and Valuation

8th Edition

ISBN:9781285190907

Author:James M. Wahlen, Stephen P. Baginski, Mark Bradshaw

Publisher:James M. Wahlen, Stephen P. Baginski, Mark Bradshaw

Chapter9: Operating Activities

Section: Chapter Questions

Problem 12QE

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Assume that actual returns and expected returns to plan assets in a defined benefit pension plan are +$10 and +$12, respectively. What is the effect in the current period on pension expense? Select One: a.Pension expense is increased by $10 b.Pension expense is reduced by $10 c.Pension expense is reduced by $12 d.None of the listed answers
Th e relationship between the periodic pension cost and the plan’s funded status is bestexpressed in which of the following?A . Periodic pension cost of –£483 = Ending funded status of –£4,774 – Employer contributions of £693 – Beginning funded status of –£4,984.B . Periodic pension cost of £1,322 = Benefi ts paid of £1,322.C . Periodic pension cost of £210 = Ending funded status of –£4,774 – Beginning fundedstatus of –£4,984
Which of the following is NOT computed by an Acturay on behlaf of a firm Select one: a. Total sales revenue b. The pension obligation c. THe annual cost of servicing the pension plan d. The cost of amendments to the pension plan Clear my choice
Warrick Boards calculated pension expense for its underfunded pension plan as follows: ($ in millions) Service cost $ 224 Interest cost 150 Expected return on the plan assets ($100 actual, less $10 gain) (90 ) Amortization of prior service cost 8 Amortization of net loss 2 Pension expense $ 294 Required: Which elements of Warrick’s balance sheet are affected by the components of pension expense? What are the specific changes in these accounts?
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1. What is the actual return on pension plan assets? 2. What is the amount of actuarial gain or loss that will be taken to other comprehensive income? if gain positive amount, if loss negative amount Example: gain --> 1,000 loss --> (1,000)
Indicate by letter whether each of the events listed below increases (I), decreases (D), or has no effect (N) on an employer's periodic pension expense in the year the event occurs. Events 1. Interest cost. _____ 2. Amortization of prior service cost---AOCI. ______ 3.Excess of the expected return on plan assets over the actual return _____ 4. Expected return on plan assets. _____ 5. A plan amendment that increases benefits is made retroactive to prior years. ____ 6. Actuary's estimate of the PBO is increased.…
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3. Presented below is information related to the pension plan of Zimmer Inc. for the year 2018. 1. The service cost related to pension expense is $260,000 using the projected benefits approach. 2. The projected benefit obligation and the accumulated benefit obligation at the beginning of the year are $350,000 and $280,000, respectively. The expected return on plan assets is 9% and the settlement rate is 10%. 3. The accumulated OCI – prior service cost at the beginning of the year is $140,000. The company has a workforce of 200 employees, all who are expected to receive benefits under the plan. The total number of service- years is 1,000 and the service-years attributable to 2018 is 200. The company has decided to use the years-of-service method of amortization for these costs. At the beginning of the period, the fair value of pension plan assets was $280,000. The company had an Accumulated OCI (loss) at the beginning of the period of $90,000. Any amortization of unrecognized net loss…
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