A postretirement plan promises health care coverage for all employees who retire after age 62 and complete service of 15 years. As of January 1, 2020, one 50-year old participant has rendered services for 8 years, and is expected to retire at age 65. The following amounts pertain to theparticipant's benefits.Present value of postretirement benefit cash flow stream at the date of retirement $30,000Present value of postretirement cash flow stream on Jan. 1, 2020$4,000What is the value of the accumulated postretirement benefit obligation (APBO) on January 1, 2020?Select one:OOOa. $2,133b. $1,391c. $1,600d. $12,000

Accumulated Post-retirement Benefit Obligation (ABOP) is the actual current value of benefits…

A postretirement plan promises health care coverage for all employees who retire after age 62 and complete service of 15 years. As of January 1, 2020, one 50-year old participant has rendered services for 8 years, and is expected to retire at age 65. The following amounts pertain to th participant's benefits. Present value of postretirement benefit cash flow stream at the date of retirement $30,000 Present value of postretirement cash flow stream on Jan. 1, 2020 $4,000 What is the value of the accumulated postretirement benefit obligation (APBO) on January 1, 2020?

A postretirement plan promises health care coverage for all employees who retire after age 62 and complete service of 15 years. As of January 1, 2020, one 50-year old participant has rendered services for 8 years, and is expected to retire at age 65. The following amounts pertain to th participant's benefits. Present value of postretirement benefit cash flow stream at the date of retirement $30,000 Present value of postretirement cash flow stream on Jan. 1, 2020 $4,000 What is the value of the accumulated postretirement benefit obligation (APBO) on January 1, 2020?

SWFT Individual Income Taxes

43rd Edition

ISBN:9780357391365

Author:YOUNG

Publisher:YOUNG

Chapter19: Deferred Compensation

Section: Chapter Questions

Problem 35P

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A postretirement plan promises health care coverage for all employees who retire after age 62 and complete service of 15 years. As of january 1, 2020, one 50- year old participant has rendered services for 8 years, and is expected to retire at age 65. The following amounts pertain to the participants benefits. Present value of postretirement benefit cash flow stream ut the date of retirement s30.000 Present value of postretirement cash flow stream an jan. 1, 2020 $4.000 What is the value of the accumulated postretirement benefit obligation (APBO) on January 1, 20207 Select one a. $2,133 b. $1.391 C.$1,600 d. $12.000
Assume the following pension data for year 2019: Service cost $105,000 Contribution $90,000 Actual return $70,000 Benefits $40,000 Plan assets 1/1/19 $700,000 PBO 1/1/19 $810,000 Interest rate 10% Compute pension expense, PBO 12/31/19 and PA 12/31/19. Prepare all journal entries. Show all computations. I recommend using a pension worksheet, but you can do it without one.
Your employer contributes $500 per month, at the beginning of each month, to a retirement fund on your behalf. The contributions earn interest at a rate of 6% per year, compounded monthly. At the end of twenty years, what will be the balance of the fund? Group of answer choices $69,790 $232,175 $70,139 $220,713 $231,020
Determine the present value of future contributions to a pension plan for a person aged 35, earning 30.000$ per year and expecting to retire at 65. The pension plan requires contributions of 5% of salary and the employee expects to receive average annual salary increases of 3%. Use an annual effective rate of interest of 7% and assume contributions are made at the end of each year.
(Pension Expense, Journal Entries) The following information is available for the pension plan of Radcliffe Company for the year 2020. Actual and expected return on plan assets $ 15,000 Benefits paid to retirees 40,000 Contributions (funding) 90,000 Interest/discount rate 10% Prior service cost amortization 8,000 Projected benefit obligation, January 1, 2020 500,000 Service cost 60,000 Instructions a. Compute pension expense for the year 2020. b. Prepare the journal entry to record pension expense and the employer's contribution to the pension plan in 2020.
Assume that a pension plan offers to pay $500,000 on a person's retirement (his/her sixty-fifth birthday) or a semi-annual annuity for the remainder of the person's life – i.e., starting 6 months from the date of retirement and including his/her date of death. Interest rates are 7 percent compounded annually, and a person's life expectancy has been determined statistically as being 78.5 years. Calculate the amounț of the annuity that would make a person indifferent between the options?l .Ysm
Gorky-Park Corporation provides postretirement health care benefits to employees who provide at least 12 years of service and reach age 62 while in service. On January 1, 2024, the following plan-related data were available: Accumulated postretirement benefit obligation Fair value of plan assets Average remaining service period to retirement Average remaining service period to full eligibility ($ in millions) $ 130 None 25 years (same in previous 10 years) 20 years (same in previous 10 years) On January 1, 2024, Gorky-Park amends the plan to provide certain dental benefits in addition to previously provided medical benefits. The actuary determines that the cost of making the amendment retroactive increases the APBO by $20 million. Management chooses to amortize the prior service cost on a straight-line basis. The service cost for 2024 is $38 million. The interest rate is 9%. Required: 1. Calculate the postretirement benefit expense for 2024. 2. Prepare the journal entry to record the…
Company A has established a defined benefit plan for the employee. Annual payments under the plan are equal to highest lifetime salary multiplied by 2% multiplied by the number of years with the entity. On December 31, 2020, an employee had worked with the entity for 15 years. The current annual salary of the employee is P600,000. The employee is expected to retire in 10 years and the increase in salary is expected to be 4% per year. The discount rate is 10%. The employee is expected to live 8 years after retirement and shall receive the first annual pension payment one year after retirement. Compute for the ff: 1)Current service cost in 2021, 2022, 2023 and 2024 2)Interest expense in 2021, 2022, 2023 and 2024 3)PBO, Dec. 31,2021, Dec. 31,2022, Dec. 31,2023 and Dec. 31,2024
The following facts apply to the pension plan of Novak Inc. for the year 2020. Plan assets, January 1, 2020 $490,400 Projected benefit obligation, January 1, 2020 490,400 Settlement rate 8 % Service cost 38,500 Contributions (funding) 27,300 Actual and expected return on plan assets 48,000 Benefits paid to retirees 32,500 Using the preceding data, compute pension expense for the year 2020. As part of your solution, prepare a pension worksheet that shows the journal entry for pension expense for 2020 and the year-end balances in the related pension accounts. (Enter all amounts as positive.) NOVAK INC.Pension Worksheet—2020 General Journal Entries Memo Record Items Annual PensionExpense Cash Pension Asset/
The following facts apply to the pension plan of Splish Inc. for the year 2020. Plan assets, January 1, 2020 $525,500 Projected benefit obligation, January 1, 2020 525,500 Settlement rate 8% Service cost 36,800 Contributions (funding) 23,800 Actual and expected return on plan assets 49,800 Benefits paid to retirees 30,300 Using the preceding data, compute pension expense for the year 2020. As part of your solution, prepare a pension worksheet that shows the journal entry for pension expense for 2020 and the year-end balances in the related pension accounts.
A death benefit on a life insurance policy can be paid in one of the following three ways: (i) A perpetuity of $250 at the end of each month (ii) $795.70 at the end of each month for n years (iii) One payment of $81,007 at the end of n years If each payment method produces the same present value for the death benefit, what is the present value of the death benefit? A. 48,300 B. 55,600 C. 61,900 D. 69,200 E. 78,500
Company A has established a defined benefit plan indicating a plan formula for annual benefit equal to 2% multiplied by the number of years in service multiplied by the final year’s salary. The annual benefit is payable at the end of each year. An employee was hired by the entity on January 1,2000 and expected to retire on December 31, 2044. The employee’s retirement is expected to span 21 years. The employee’s final salary at retirement is expected to be P800,000 and the appropriate discount rate is 8%. On January 1, 2020, the plan formula was amended by increasing the percentage from 2% to 3%. The amendment was made retroactive to consider past service years. Compute for the ff: 1)PBO, Jan 1, 2020 (before amendment), Jan 1, 2020 (after amendment), Dec. 31,2020, Dec. 31, 2021 and Dec. 31 2022 2)Past service cost, 2020, 2021 and 2022 3)Current service cost, 2020, 2021 and 2022 4)Interest expense, 2020, 2021 and 2022