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Exam 20: Accounting for Pensions and Postretirement Benefits

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Question 1

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The actual return on plan assets

A) is equal to the change in the fair value of the plan assets during the year.
B) includes interest, dividends, and changes in the fair value of the fund assets.
C) is equal to the expected rate of return times the fair value of the plan assets at the beginning of the period.
D) All of these answer choices are correct.

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Question 2

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Presented below is pension information for Green Company for the year 2016: The amount of pension expense to be reported for 2016 is

A) $93,000.
B) $69,000.
C) $60,000.
D) $45,000.

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Question 3

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Use the following information for questions The following information for Cooper Enterprises is given below: There was no accumulated OCI at January 1, 2016.The average remaining service life of employees is 10 years. -What is the pension expense that Cooper Enterprises should report for 2016?

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 2016 and benefits paid were $1,125,000.Lockett estimates that the average remaining service life is 15 years. -The actual return on plan assets in 2016 was

In a defined-contribution plan, a formula is used that

When a company adopts a pension plan, past service costs should be charged to

Differences between pensions and postretirement benefits include all of the following except

Clarkson Co.provides the following information about its pension plan for the year 2016. Based on this information, what is the pension expense for 2016?

A curtailment occurs when a company enters into a transaction that eliminates all further obligations for part or all of the benefits provided under a defined benefit plan.

A pension plan is contributory when the employer makes payments to a funding agency.

Dawson plc amends its defined pension plan on January 1, 2016, resulting in £420,000 of past service cost.The company has 400 active employees, of which 100 vest immediately (25%) and the other 300 (75%) vest in four years.The past service cost applicable to the vested employees is £105,000 and vests immediately.The past service cost related to the unvested employees is £315,000 and vests over five years.How much of past service costs would Dawson include in pension expense in 2016?

Clarkson plc amends its defined pension plan on January 1, 2016, resulting in £520,000 of past service cost.The company has 600 active employees, of which 120 vest immediately (20%) and the other 480 (80%) vest in three years.The past service cost applicable to the vested employees is £104,000 and vests immediately.The past service cost related to the unvested employees is £416,000 and vests over five years.How much of the past service costs would Clarkson include in pension expense in 2016?

In accounting for a pension plan, any difference between the pension cost charged to expense and the payments into the fund should be reported as

The interest rate used on the defined benefit obligation component of pension expense

Past service cost is amortized on a

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

Towson Ltd.has experienced tough competition, leading it to seek concessions from its employees in the company's pension plan.In exchange for promises to avoid layoffs and wage cuts, the employees agreed to receive lower pension benefits in the future.As a result, Towson amended its pension plan on January 1, 2016, and recorded past service cost of €225,000.The average period to vesting for the benefits affected by this plan is 6 years.What is the amount of past service cost included in pension expense for 2016?

Companies report any actuarial gains or losses charged or credited to other comprehensive income in the statement of financial position.

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

Carlton Co.provides the following information about its pension plan for the year 2016. Based on this information, what is the pension expense for 2016?