The following information related to the Postretirement Benefits (health) for the Union Company on12/31/2020:Expected postretirement Benefits Obligation (EPBO) $ 800,000, and the AccumulatedPostretirement Benefits Obligation (APBO) is $400,000.Attribution period 20 years.Number of years employees worked to date 10 years.Interest rate 10%.Required:a. Calculate the EPBO at end of 2021.b. Calculate accumulated postretirement benefits (APBO) for 2021.c. Analyze the increase in 2021 APBO.

Here, To Find: Part a. Calculate the EPBO at end of 2021 =? Part b. Calculate accumulated…

Answered: The following information related to…

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter19: Accounting For Post Retirement Benefits

Section: Chapter Questions

Problem 11RE

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The following facts relate to the Lional Co. postretirement benefits plan for 2021:· Service cost- P136,000· Discount rate- 9%· Post-employment benefit obligation, January 1, 2021- P1,200,000· Benefit payments to employees- P92,000The amount of postretirement expense for 2021 is?
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 for Storm plc apply to the pension plan for 2019.1. Annual service cost is 18,0002. Discount Rate is 10%3. Actual return on plan assets is $22,0004. Annual funding contributions are $34,0005. Benefits paid to retirees during the year are $20,5006. Changes in actuarial assumptions establish the end of year defined benefit obligation at $285,000 Required:a. Prepare a pension worksheet using the following table and given the following opening balances. b. Prepare the necessary pension journal entries in accordance with IAS 19 pension Benefits for Storm plc for year ending 2019.
Computing ABO, PBO Mallard Company sponsors a pension plan with the following pension benefit: Benefit paid at each year-end during retirement = (Number of years worked x Annual salary at retirement) +25 Employee Josie began work with the company and received credit for service as of January 1 of Year 1. Josie is expected to work a total of 30 years with an annual salary at retirement of $100,000. She is expected to draw 10 years of retirement benefits. The discount rate is 10%. Note: Carry all decimals in calculations; round the final answer to the nearest dollar. a. Compute the PBO on December 31 of Year 10, if Josie's current salary is $30,000. b. Compute the ABO on December 31 of Year 10, if Josie's current salary is $30,000.
Bonita Corp. sponsors a defined benefit pension plan for its employees. On January 1, 2020, the following balances relate to this plan. Plan assets $469,800 Projected benefit obligation 607,000 Pension asset/liability 137,200 Accumulated OCI (PSC) 97,100 Dr. As a result of the operation of the plan during 2020, the following additional data are provided by the actuary. Service cost $91,100 Settlement rate, 8% Actual return on plan assets 54,400 Amortization of prior service cost 19,100 Expected return on plan assets 51,600 Unexpected loss from change in projected benefit obligation, due to change in actuarial predictions 79,700 Contributions 99,500 Benefits paid retirees 85,800 Using the data above, compute pension expense for Bonita Corp. for the year 2020 by preparing a pension worksheet. (Enter all amounts as positive.) BONITA CORP.Pension Worksheet General Journal Entries Memo…
Vines Company agrees to provide lumpsum retirement benefits to an employee equal to 5% of final salary for each year of service. Information on an employee is shown below: Average annual salary level on December 31, 2020 - 1,000,000 Average annual salary increase starting January 1, 2021 and every year thereafter - 3% Average service lives before entitlement to retirement benefit (2021-2025) - 5 years Discount rate per year - 10% How much is the total lump sum retirement benefit?
The company agrees to provide a lump-sum retirement benefit to employees equal to 69% of final salary for each year of service. Information on an employee is shown below Salary level on January 1, 2021 3,000,000 Annual salary increase starting in 2022 2% Service years before retirement (Jan 1, 2021 to Dec 31, 2025) 5 years 10% Discount rate per year What is the current service cost for the year ended December 31, 2021?
plan for an employee. Annual payments under the pension Jessabel Company has established a defined benefit pension plan are equal to the employee's highest lifetime salary The employee is expected to retire in 5 years and the salary multiplied by 3% multiplied by number of years with the On December 31, 2020, the employee had worked for Jessabe Problem 17-10 (IAA) entity. Company for 15 years. The current salary is P500,000 increases are expected to average 4% per year during th period. The employee is expected to live for 6 years after retirine and will receive the first annual pension payment one yea after retirement. The discount rate is 12%. Future value of 1 at 4% for 5 periods PV of an ordinary annuity of 1 at 12% for 6 periods PV of 1 at 12% for 5 periods 1.217 4.111 0.567 What is the projected benefit obligation on December 31, 2020? a. 638,269, b. 225,000 c. 524,460 d. 608,500
Compute for the annual retirement benefit expense for 2020. (present answer in whole number) EIGHT Company has a defined contribution retirement plan that covers its seventy five existing employees. The term of the plan require EIGHT to contribute 7.5% of the annual employees' salaries to the retirement plan each year. The payroll records show the average quarterly salaries as follows: 2020 1,275,850 2021 1,390,675
Herring Wholesale Company has a defined benefit pension plan. On January 1, 2021, the following pension-related data were available: ($ in thousands) Net gain-AOCI $ 170 Accumulated benefit obligation Projected benefit obligation 1,170 1,400 Fair value of plan assets 1,100 Average remaining service period of active employees (expected to remain constant for the next several years) 15 years The rate of return on plan assets during 2021 was 9%, although it was expected to be 10%. The actuary revised assumptions regarding the PBO at the end of the year, resulting in a $23,000 decrease in the estimate of that obligation. Required: 1. Calculate any amortization of the net gain that should be included as a component of net pension expense for 2021. 2. Assume the net pension expense for 2021, not including the amortization of the net gain component, is $325,000. What is pension expense for the year? 3. Determine the net loss-AOCI or net gain—AOCI as of January 1, 2022. (For all requirements,…
1. Pension worksheets for the Simpson Company for years ended December 31, 2020 and 2021. 2. Journal entries to record the pension expense for both years. 3. A reconciliation schedule for both years. Assumptions for 2011: Plan assets, January 1, 2020 $ 450,000 Projected benefit obligation, January 1, 2020 450,000 Annual service cost for 2020 27,000 Settlement rate for 2020 7% Actual return on plan assets for 2020 30,000 Contributions for 2020 32,000 Benefits paid to retirees during 2020 17,000 Pension Asset/Liability, January 1, 2020 - Assumptions for 2012: Present value of prior years service cost benefits granted January 1, 2021 $ 42,000 Annual service cost for 2021 28,000 Settlement rate for 2021 7% Actual return on plan assets for 2021 31,000 Contributions for 2021 29,000…
Herring Wholesale Company has a defined benefit pension plan. On January 1, 2021, the following pension-related data were available: ($ in thousands) Net gain—AOCI $ 170 Accumulated benefit obligation 1,170 Projected benefit obligation 1,400 Fair value of plan assets 1,100 Average remaining service period of active employees (expected to remain constant for the next several years) 15 years The rate of return on plan assets during 2021 was 9%, although it was expected to be 10%. The actuary revised assumptions regarding the PBO at the end of the year, resulting in a $23,000 decrease in the estimate of that obligation. Required:1. Calculate any amortization of the net gain that should be included as a component of net pension expense for 2021.2. Assume the net pension expense for 2021, not including the amortization of the net gain component, is $325,000. What is pension expense for the year?3. Determine the net loss—AOCI or net gain—AOCI as of…

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