Return toExercise 17-2 (Algo) Determine the projected benefit obligation [LO17-3]On January 1, 2021, Ravetch Corporation's projected benefit obligation was $55 million. During 2021, pension benefits paid by thetrustee were $5 million. Service cost for 2021 is $15 million. Pension plan assets (at fair value) increased during 2021 by $7 million asexpected. At the end of 2021, there were no pension-related other comprehensive income (OCI) accounts. The actuary's discount ratewas 12%.Required:Determine the amount of the projected benefit obligation at December 31, 2021. (Enter your answers in millions rounded to 2decimal places (i.e., 5,500,000 should be entered as 5.50). Amounts to be deducted should be indicated with a minus sign.)O Answer is complete but not entirely correct.Projected Benefit ObligationBeginning of 202155.00Service cost15.00Interest cost6.60Retiree benefits7.00End of 202183.60

Projected benefit obligation is the actuarial measurement of the amount that the company needs today…

Answered: Return to Exercise 17-2 (Algo)…

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter19: Accounting For Post Retirement Benefits

Section: Chapter Questions

Problem 7RE

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Exercise 17-2 (Algo) Determine the projected benefit obligation [LO17-3] On January 1, 2021, Ravetch Corporation's projected benefit obligation was $55 million. During 2021, pension benefits paid by the trustee were $5 million. Service cost for 2021 is $15 million. Pension plan assets (at fair value) increased during 2021 by $7 million as expected. At the end of 2021, there were no pension-related other comprehensive income (OCI) accounts. The actuary's discount rate was 12%. Required: Determine the amount of the projected benefit obligation at December 31, 2021. (Enter your answers in millions rounded to 2 decimal places (i.e., 5,500,000 should be entered as 5.50). Amounts to be deducted should be indicated with a minus sign.)
Exercise 17-10 (Algo) Determine pension expense [LO17-6, 17-7] Abbott and Abbott has a noncontributory, defined benefit pension plan. At December 31, 2021, Abbott and Abbott received the following information: Projected Benefit Obligation Balance, January 1 Service cost ($ in millions) $125 22 Interest cost 15 Benefits paid (8) Balance, December 31 $154 Plan Assets Balance, January 1 Actual return on plan assets $75 10 Contributions 2021 22 Benefits paid |(8) Balance, December 31 $99 The expected long-term rate of return on plan assets was 12%. There was no prior service cost and a negligible net loss-AOCI on January 1, 2021. Required: 1. Determine Abbott and Abbott's pension expense for 2021. 2 Prenare the iournal entries to record Abbott ancd Abbott's a) pension expense (6) fundina and (c) pavment for 2021
18 Fajardo Company provided the following pension plan information: Projected benefit obligation – January 1, 2021 3,500,000 Fair value of plan assets – January 1, 2021 2,800,000 Pension benefits paid during the year 250,000 Current service cost for 2021 1,750,000 Past service cost for 2021 425,000 Actual return on plan assets 180,000 Contribution to the plan 1,500,000 Actuarial loss due to change in assumption on PBO 200,000 Discount or settlement rate 10% What amount should be reported as accrued benefit cost on December 31, 2021? Group of answer choices 1,045,000 1,750,000 1,745,000 700,000
Exercise 17-2 (Algo) Determine the projected benefit obligation [LO17-3] On January 1, 2024, Ravetch Corporation's projected benefit obligation was $46 million. During 2024, pension benefits paid by the trustee were $6 million. Service cost for 2024 is $10 million. Pension plan assets (at fair value) increased during 2024 by $8 million as expected. At the end of 2024, there were no pension-related other comprehensive income (OCI) accounts. The actuary's discount rate was 10%. Required: Determine the amount of the projected benefit obligation at December 31, 2024. Note: Enter your answers in millions rounded to 2 decimal places (i.e., 5,500,000 should be entered as 5.50). Amounts to be deducted should be indicated with a minus sign. Projected Benefit Obligation Beginning of 2024 Service cost Interest cost End of 2024 $ 0.00
Exercise 17-10 (Algo) Determine pension expense [LO17-6, 17-7] Abbott and Abbott has a noncontributory, defined benefit pension plan. At December 31, 2021, Abbott and Abbott recei following information: Projected Benefit Obligation Balance, January 1 ($ in millions) $125 Service cost Interest cost 22 Benefits paid 15 (8) Balance, December 31 $154 Plan Assets Balance, January 1 Actual return on plan assets Contributions 2021 Benefits paid $75 10 22 (8) Balance, December 31 $99 The expected long-term rate of return on plan assets was 12%. There was no prior service cost and a negligible net loss-A January 1, 2021. Required: 1. Determine Abbott and Abbott's pension expense for 2021. 2. Prepare the journal entries to record Abbott and Abbott's (a) pension expense, (b) funding, and (c) payment for 2021.
Determining Pension Expense The following information pertains to Qdobe Corporation’s defined benefit pension plan for 2020. Service cost $512,000 Actual and expected gain on plan assets 112,000 Actuarial loss on PBO incurred during 2020 128,000 Amortization of unrecognized prior service cost 16,000 Annual interest on pension obligation 160,000 What amount should Qdobe report as pension expense in its 2020 income statement? Assume no beginning balance in Accumulated OCI—Pension Gain/Loss. Pension expense, 2020
8. P Corp. has a defined benefit pension plan. On December 31, 2021 (the end of P's fiscal year), the following pension-related data were available: Projected Benefit Obligation ($ in millions) Balance, January 1, 2021 $240 Service cost 41 Interest cost, discount rate, 5% 12 Gain due to changes in actuarial assumptions in 2021 (5) Pension benefits paid (20) Balance, December 31, 2021 $268 Plan Assets Balance, January 1, 2021 $250 Actual return on plan assets 20 (Expected return on plan assets, $22.5) Cash contributions 35 Pension benefits paid (20) Balance, December 31, 2021 $285 January 1, 2021, balances: Prior service cost (amortization $4 per year) $24 Net gain (any amortization over 15 years) 55 Required: （show the computing process and precise journal entries） 1) Prepare the 2021 journal entry to record pension expense. 2) Prepare the 2021 journal entry to record the…
Problem 17-6 (Algo) Determine the PBO; plan assets; pension expense; two years (LO17-3, 17-4, 17-6] Stanley-Morgan Industries adopted a defined benefit pension plan on April 12, 2021. The provisions of the plan were not made retroactive to prior years. A local bank, engaged as trustee for the plan assets, expects plan assets to earn a 10% rate of return. The actual return was also 10% in 2021 and 2022.* A consulting firm, engaged as actuary, recommends 5% as the appropriate discount rate. The service cost is $140,000 for 2021 and $220,000 for 2022. Year-end funding is $150,000 for 2021 and $160,000 for 2022. No assumptions or estimates were revised during 2021. * We assume the estimated return was based on the actual return on similar investments at the inception of the plan and that, since the estimate didn't change, that also was the actual rate in 2022. Required: Calculate each of the following amounts as of both December 31, 2021, and December 31, 2022: (Enter your answers in…
NOTE 17: EMPLOYEE BENEFIT PLANS (in part) ($ in millions) Changes in projected benefit obligation: Obligation at beginning of period Service cost Interest cost Pension Benefits 2020 2019 $ 648 1 $ 637 1 31 34 Actuarial (gain) loss Benefits paid Obligation at end of period Change in plan assets: 54 37 (50) (50) $ 684 $ 659 Fair value of plan assets at beginning of period Actual return (loss) on plan assets* $ 496 $ 431 70 52 Employer contribution 24 74 Benefits paid (50) (50) Fair value of plan assets at end of period 540 507 Net liability recognized at end of period $ (144) $ (152) *Expected return $30 and $29 in 2020 and 2019, respectively Required: 1. What amount did Maur report in its balance sheet related to the pension plan at June 30, 2020? 2. When calculating pension expense at June 30, Maur included $10 million in its income statement as the amortization of unrecognized net actuarial loss (net loss-AOCI). This AOCI account had a balance of $350 million at the beginning of the…
The following pension-related data pertain to Metro Recreation's noncontributory, defined benefit pension plan for 2021: Projected benefit obligation Accumulated benefit obligation Plan assets (fair value) Interest (discount) rate, 8 Expected return on plan assets, 10% Prior service cost-AOCI (from Dec. 31, 2020, amendment) ($ in 000s) Jan. 1 $5,500 3,785 6,630 Dec. 31 $5,780 4,090 7,075 980 683 Net loss-AOCI Average remaining service life: 10 years Gain due to changes in actuarial assumptions Contributions to pension fund (end of year) Pension benefits paid (end of year) 66 480 435 Required: Prepare a pension spreadsheet that shows the relationships among the various pension balances, shows the changes in those balances, and computes pension expense for 2021. (Enter credit amounts with a minus sign and debit amounts with a positive sign. Enter your answers in thousands (i.e. 200,000 should be entered as 200).) Net Pension Pension Prior Service Cost-AOCI Net Loss- AOCI (Liability)/…
A Company provided the following pension plan information: Projected benefit obligation – January 1, 2021 3,500,000 Fair value of plan assets – January 1, 2021 2,800,000 Pension benefits paid during the year 250,000 Current service cost for 2021 1,750,000 Past service cost for 2021 425,000 Actual return on plan assets 180,000 Contribution to the plan 1,500,000 Actuarial loss due to change in assumption on PBO 200,000 Discount or settlement rate 10% What is the fair value of plan assets on December 31, 2021?
The following information relates to the defined benefit pension plan of Nelson, Inc. Projected benefit obligation Fair value of plan assets Accumulated OCI-net actuarial gain Settlement rate (for year) Expected rate of return (for year) The interest cost for 2020 is $158,640 $211,520 12/31/19 2,644,000 3,118,000 432,000 O $240,120 O $280,140 O None of the above 6% 8% 12/31/20 4,002,000 3,328,000 480,000 For 2020, Nelson estimates that the average remaining service life of its current employees is 8 years. Nelson's contribution to the plan was $364,000 in 2020 and benefits paid to retirees were $276,000, 6% 7%

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