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Exam 20: Accounting for Pensions and Postretirement Benefits

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Question 21

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Gains and losses that relate to the computation of pension expense should be

A) recorded currently as an adjustment to pension expense in the period incurred.
B) recorded currently and in the future by applying the corridor method which provides the amount to be amortized.
C) amortized over a 10-year period.
D) recorded only if a loss is determined.

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Question 22

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Past service cost is amortized on a

A) straight-line basis over the expected future years of service.
B) years-of-service method or on a straight-line basis over the average remaining service life of active employees.
C) straight-line basis over 10 years.
D) straight-line basis over the average remaining service life of active employees or 10 years, whichever is longer.

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Question 23

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Carlton Co.provides the following information about its Pension plan for the year 2012. Based on this information, what is the Pension expense for 2012?

The unexpected gains and losses from changes in the defined benefit obligation are called asset gains and losses.

Companies must disclose a reconciliation of how the defined benefit obligation and the fair value of plan assets changed during the year either in their financial statements or in the notes.

Presented below is pension information related to Waters Company as of December 31, 2011: The amount to be reported as Pension Asset \ Liability as of December 31, 2011 is

Whenever a defined-benefit plan is amended and credit is given to employees for years of service provided before the date of amendment

The computation of pension expense includes all the following except

In determining the present value of the prospective benefits (often referred to as the defined benefit obligation) , the following are considered by the actuary:

Use the following information for questions. The following information relates to the pension plan for the employees of Turner Co.: 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 corridor for 2011 is

Huggins Company has the following information at December 31, 2011 related to its The amount of pension asset \ liability Huggins Company would recognize at December 31, 2011 is

Yamamoto Company experienced an actuarial loss of ¥750 in its defined benefit plan in 2012.Yamamoto has elected to recognize these losses immediately.For 2012, Yamamoto's revenues are ¥125,000, and expenses (excluding pension expense of ¥14,000, which does not include the actuarial loss) are ¥85,000.What is the amount of net income that would be presented in Yamamoto's statement of comprehensive income for 2012, if the company recognizes the loss in net income?

Use the following information for questions. The following data are for the pension plan for the employees of Lockett Company. Lockett's contribution was $1,260,000 in 2011 and benefits paid were $1,125,000.Lockett estimates that the average remaining service life is 15 years. -Assume that the actual return on plan assets in 2011 was $800,000.The unexpected gain on plan assets in 2011 was

For defined benefit plans, IFRS recognizes a pension asset or liability as the funded status of the plan.

Which of the following disclosures of pension plan information would not normally be required?

Use the following information for questions. The following information relates to the pension plan for the employees of Turner Co.: 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 interest cost for 2011 is

A pension asset is reported when

Winston Corporation had a defined benefit obligation of €3,500,000 and plan assets of €3,000,000 at January 1, 2012.Winston's unrecognized net pension loss was €615,000 at that time.The average remaining service period of Winston's employees is 5 years.What is Winston's minimum amortization of pension loss?

Use the following information for questions. The following information relates to the pension plan for the employees of Turner Co.: 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

The fair value of pension plan assets is used to determine the corridor and to calculate the expected return on plan assets. Expected Return Corridor on Plan Assets