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 51

Multiple Choice

Review LaterAdd Note

Review Later

The annual pension expense for what type of pension plan(s) is recorded by a journal entry that includes a debit to pension expense and a credit to a noncurrent liability?

A) A defined benefit plan only.
B) A defined contribution plan only.
C) Both a defined benefit and a defined contribution plan.
D) This is not the correct entry.

E) None of the above
F) A) and D)

Correct Answer

verified

Show Answer

Question 52

Multiple Choice

Review LaterAdd Note

Review Later

The estimated medical costs are expected to be $7,500 during an employee's retirement. The retiree is expected to pay 30% of the cost and Medicare is expected to pay 50% of the cost. What is the company's estimated net cost of benefits?

A) $5,250.
B) $7,500.
C) $1,500.
D) $3,750.

E) A) and D)
F) All of the above

Correct Answer

verified

Show Answer

Question 53

Multiple Choice

Review LaterAdd Note

Recording the expense for postretirement benefits will not:

Bernard Corporation has an unfunded postretirement health care benefit plan. Life insurance and medical care benefits are provided to employees who render 12 years of service and attain age 55 while in service to the company. At the end of 2013, Teri Clark is 35. She was hired by Bernard five years ago at age 30 and is expected to retire at the age of 62. The expected postretirement benefit obligation for Teri is $50,000 at the end of 2013 and $60,000 at the end of 2014. Required: Calculate the accumulated postretirement benefit obligation at the end of 2013 and 2014 and the service cost for 2013 and 2014 pertaining to Teri.

Assume the actuary estimates the net cost of providing health care benefits to a particular employee during his retirement years to have a present value of $60,000. If the benefits relate to an estimated 25 years of service and five of those years have been completed:

In a postretirement health care plan, prior service cost is attributed to the service of active employees from the date of the amendment to:

What was the balance of the net pension asset/liability reported in the balance sheet at the end of the previous year?

Amortizing prior service cost for pension plans will:

The net postretirement benefit liability (APBO minus plan assets) is increased by:

The employer has an obligation to provide future benefits for:

Pension data for Sewell Corporation include the following for the current calendar year: Required: Assuming cash contributions were made at the end of the year, what was the amount of those contributions?

Amortizing a net gain for pensions and other postretirement benefit plans will:

Bazerman Inc. has a postretirement health care benefit plan. On January 1 of the current calendar year, the following plan-related data were available. The rate of return on plan assets during the year was 12%. The expected return was 10%. The actuary revised assumptions regarding the APBO at the end of the year, resulting in a $42,000 increase in the estimate of the obligation. Required: 1) Calculate any amortization of net loss that should be included as a component of postretirement benefit expense for the current year. 2) Determine the net loss or gain as of December 31 of the current year.

Actuary and trustee reports indicate the following changes in the PBO and plan assets of Sporting Industries during 2013: Required: 1) Determine Sporting's pension expense for 2013 and prepare the appropriate journal entries to record the expense as well as the cash contribution to plan assets. 2) Prepare the appropriate journal entries to record any 2013 gains and losses.

Carolina Consulting Company has a defined benefit pension plan. The following pension-related data were available for the current calendar year: There were no other relevant data. Required: 1) Calculate the 2013 pension expense. Show calculations. 2) Prepare the 2013 journal entries to record pension expense and funding. 3) Prepare any journal entries to record any 2013 gains or losses.

Actuarial gains and losses are reported as OCI as they occur using:

What was the PBO at the beginning of the year?

The component of pension expense that results from amending a pension plan to give recognition to previous service of currently enrolled employees is the amortization of:

What is the theoretical and practical trade-off when measuring the pension liability using the projected benefit obligation compared to the accumulated benefit obligation?

Oberon Company provides postretirement health care benefits to employees who provide at least 10 years of service and reach the age of 65 while in service. On January 1 of the current year, the following plan-related data were available. On January 1 of the current year, Oberon amended the plan to provide dental benefits. The actuary determines that the cost of making the amendment increases the APBO by $10,000,000. Management chooses to amortize this amount on a straight-line basis. The service cost is $60,000,000. The appropriate interest rate is 10%. Required: Calculate the postretirement benefit expense for the current year.