Kingbird, Inc. is a furniture manufacturing company with 50 employees. Recently, after a long negotiation with the local labor union,the company decided to initiate a pension plan as a part of its compensation plan. The plan will start on January 1, 2025. Eachemployee covered by the plan is entitled to a pension payment each year after retirement. As required by accounting standards, thecontroller of the company needs to report the pension obligation (liability). On the basis of a discussion with the supervisor of thePersonnel Department and an actuary from an insurance company, the controller develops the following information related to thepension plan.Average length of time to retirementExpected life duration after retirementTotal pension payment expected each year after retirement15 years11 yearsfor all employees. Payment made at the end of the year.$808,500 per yearThe interest rate to be used is 10%.Click here to view factor tables.On the basis of the information above, determine the present value of the pension obligation (liability). (Round factor values to 5decimal places, e.g. 1.25124 and final answer to 0 decimal places, e.g. 458,581.)

To determine the present value of the pension obligation (liability) for Kingbird, Inc., we need to…

Answered: Kingbird, Inc. is a furniture…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Prepare journal entry to record the total liabilities for termination benefits.
Flounder, Inc. is a furniture manufacturing company with 50 employees. Recently, after a long negotiation with the local labor union, the company decided to initiate a pension plan as a part of its compensation plan. The plan will start on January 1, 2020. Each employee covered by the plan is entitled to a pension payment each year after retirement. As required by accounting standards, the controller of the company needs to report the pension obligation (liability). On the basis of a discussion with the supervisor of the Personnel Department and an actuary from an insurance company, the controller develops the following information related to the pension plan. Average length of time to retirement Expected life duration after retirement Total pension payment expected each year after retirement for all employees. Payment made at the end of the year. 15 years 11 years $811.400 per year The interest rate to be used is 8%. Click here to view factor tables On the basis of the information…
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Pronghorn, Inc. is a furniture manufacturing company with 50 employees. Recently, after a long negotiation with the local labor union, the company decided to initiate a pension plan as a part of its compensation plan. The plan will start on January 1, 2025. Each employee covered by the plan is entitled to a pension payment each year after retirement. As required by accounting standards, the controller of the company needs to report the pension obligation (liability). On the basis of a discussion with the supervisor of the Personnel Department and an actuary from an insurance company, the controller develops the following information related to the pension plan. Average length of time to retirement Expected life duration after retirement Total pension payment expected each year after retirement for all employees. Payment made at the end of the year. 15 years 11 years $816,100 per year The interest rate to be used is 8%. Click here to view factor tables. On the basis of the information…
Please help me. Thankyou.
Stanley-Morgan Industries adopted a defined benefit pension plan on April 12, 2024. 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 2024 and 2025.* A consulting firm, engaged as actuary, recommends 5% as the appropriate discount rate. The service cost is $180,000 for 2024 and $230,000 for 2025. Year-end funding is $190,000 for 2024 and $200,000 for 2025. No assumptions or estimates were revised during 2024. *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 2025. Required: Calculate each of the following amounts as of both December 31, 2024, and December 31, 2025: Note: Enter your answers in thousands (l.e., 200,000 should be entered as 200). Enter a llability as a negative amount. 1.…
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Stanley-Morgan Industries adopted a defined benefit pension plan on April 12, 2024. 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 2024 and 2025. A consulting firm, engaged as actuary, recommends 5% as the appropriate discount rate. The service cost is $240,000 for 2024 and $330,000 for 2025. Year-end funding is $250,000 for 2024 and $260,000 for 2025. No assumptions or estimates were revised during 2024. "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 2025. Required: Calculate each of the following amounts as of both December 31, 2024, and December 31, 2025. Note: Enter your answers in thousands (i.e., 200,000 should be entered as 200). Enter a liability as a negative amount. 1.…
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wifty Company sponsors a defined benefit pension plan for its employees. The following data relate to the operation of the plan for the year 2020 in which no benefits were paid. 1. The actuarial present value of future benefits earned by employees for services rendered in 2020 amounted to $55,500. 2. The company’s funding policy requires a contribution to the pension trustee amounting to $144,729 for 2020. 3. As of January 1, 2020, the company had a projected benefit obligation of $908,100, an accumulated benefit obligation of $802,100, and a debit balance of $400,100 in accumulated OCI (PSC). The fair value of pension plan assets amounted to $601,200 at the beginning of the year. The actual and expected return on plan assets was $54,100. The settlement rate was 9%. No gains or losses occurred in 2020 and no benefits were paid. 4. Amortization of prior service cost was $50,500 in 2020. Amortization of net gain or loss was not required in 2020. (a)…
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