What is the interest cost for 2023? b. What is the projected benefit obligation on December 31, 2024?
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Rachel Company has established a defined benefit pension plan for its employees. Annual payments under the pension plan are equal to 3% of an employee’s highest lifetime salary multiplied by the number of years with the entity. An employee’s salary in 2021 was P300,000. The employee is expected to retire in 10 years and the salary increases are expected to average 4% per year during that period. On December 31, 2021, the employee has worked for 12 years. The appropriate discount rate is 10% and the employee is expected to live for 5 years after retirement.
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- Oregon Company's employees are eligible for retirement with benefits at the end of the year in which both age 60 is attained and they have completed 35 years of service. The benefits provide 15 years' reimbursement for health care services of $37,000 annually, beginning one year from the date of retirement. Ralph Young was hired at the beginning of 1988 by Oregon after turning age 22 and is expected to retire at the end of 2026 (age 60). The discount rate is 4%. The plan is unfunded. The PV of an ordinary annuity of $1 where n=15 and /= 4% is 11.11839. The PV of $1 where n = 2 and /= 4% is 0.92456. With respect to Ralph, what is the interest cost to be included in Oregon's 2025 postretirement benefit expense, rounded to the nearest dollar? Multiple Choice О $14,434 О $14,509 О $15,398 None of these answer choices are correct Activate Wir Go to Settings toA corporation's pension plan provides a lifetime annual income to its employees upon retirement at age 65. The plan provides 3% for each year of service of the employee's salary upon retirement. Those who retire before 65 have their benefit reduced by 1.3% for each year before 65 that they retire. Russ retires at age 61 with 29 years of service. If his salary upon retirement is $76,763, what is his annual pension benefit? Round your answer to the nearest dollar.Clark Industries has a defined benefit pension plan that specifies annual, year-end retirement benefits equal to: 1.6% × Service years × Final year's salary Stanley Mills was hired by Clark at the beginning of 2005. • Mills is expected to retire at the end of 2049 after 45 years of service. • His retirement is expected to span 15 years. At the end of 2024, 20 years after being hired, his salary is $84,000. • The company's actuary projects Mills's salary to be $310,000 at retirement. The actuary's discount rate is 6%. For all requirements, round final answers to the nearest whole dollars. Do not round intermediate calculations. Use tables, Excel, or a financial calculator. (FV of $1, PV of $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD of $1) Required: 1. Estimate the amount of Stanley Mills's annual retirement payments for the 15 retirement years earned as of the end of 2024. 2. Suppose Clark's pension plan permits a lump-sum payment at retirement in lieu of annuity payments. Determine…
- Sheridan Ltd. initiated a one-person pension plan in January 2015 that promises the employee a pension on retirement according to the following formula: pension benefit = 2.6% of final salary per year of service after the plan initiation. The employee began employment with Sheridan early in 2015 at age 33 and expects to retire at the end of 2041, the year in which he turns 60. His life expectancy at that time is 21 years. Assume that this employee earned an annual salary of $49,000 when he joined Sheridan, that his salary was expected to increase at a rate of 4% per year, and that this remains a reasonable assumption to date. Sheridan considers a discount rate of 8% to be appropriate. (a) × Your answer is incorrect. What is the employee's expected final salary? (Round your answer to O decimal places, e.g. 5,275.) Expected final salary $ 108442Ivanhoe, Inc. has a defined-benefit pension plan covering its 50 employees. Ivanhoe agrees to amend its pension benefits. As a result, the projected benefit obligation increased by $2790000. Ivanhoe determined that all its employees are expected to receive benefits under the plan over the next 5 years. In addition, 10 employees are expected to retire or quit each year. Assuming that Ivanhoe uses the years-of-service method of amortization for prior service cost, the amount reported as amortization of prior service cost in year one after the amendment is $558000. O $651000. $930000. O $186000.Lewis Industries adopted a defined benefit pension plan on January 1, 2021. By making the provisions of the plan retroactive to prior years, Lewis incurred a prior service cost of $2 million. The prior service cost was funded immediately by a $2 million cash payment to the fund trustee on January 2, 2021. However, the cost is to be amortized (expensed) over 10 years. The service cost—$250,000 for 2021—is fully funded at the end of each year. Both the actuary’s discount rate and the expected rate of return on plan assets were 9%. The actual rate of return on plan assets was 11%. At December 31, the trustee paid $16,000 to an employee who retired during 2021.Required:Determine each of the following amounts as of December 31, 2021, the fiscal year-end for Lewis:1. Projected benefit obligation.2. Plan assets.3. Pension expense.
- D Company is evaluating amendments to its pensions plans. Plan 1 covers its salaried employees and Plan 2 provides benefits to its hourly workers. On January 1, 2016, D will grant employees in Plan 2 additional pension benefits of P240,000 based on their past service. Employees in this plan have an average period to vesting of 8 years. Plan 1 will be amended to reduce benefits by P120,000 (in exchange, employees will receive increased contributions to the company’s defined contribution plan). Employees in this plan have an average period to vesting of 6 years. What is the total past service cost included in pension expense 2016?The following information relates to John and Margie Company limited. The company adopts a pension plan on January 1, 2019. No retroactive benefits are granted to employees. The service cost each year is as follows: 2019, Ksh 400,000; 2020, Ksh 420,000; and 2021, Ksh 432,000. The projected benefit obligation at the beginning of each year is as follows: 2020, Ksh 400,000; and 2021, Ksh 840,000. The discount rate is 10% The expected long-term rate of return on plan assets is 10%, which is equal to the actual rate of return. The Company adopts a policy of funding an amount equal to the pension expense and makes the payment to the funding agency at the end of each year. Plan assets are based on the amounts contributed each year, plus a return of 10% per year, less an assumed payment of Ksh, 20,000 at the end of each year to retired employees (beginning in 2020). Required: Calculate the pension expense for the three years and prepare the journal entries for each year to be used to post…A partially completed pension spreadsheet showing the relationships among the elements that comprise the defined benefit pension plan of Universal Products is given below. The actuary's discount rate is 5%. At the end of 2019, the pension formula was amended, creating a prior service cost of $160,000. The expected rate of return on assets was 8%, and the average remaining service life of the active employee group is 20 years in the current year as well as the previous two years. Required:Fill in the missing amounts. (Enter your answers in thousands rounded to 1 decimal place.) Prior Net Pension Plan Service Net Loss Pension (Liability) ($ in thousands) PBO Assets Cost – AOCI – AOCI Expense Cash / Asset Balance, Jan. 1, 2021 $(920.0) $660.0 $152.0 $92.0 $(260.0) Service cost 112.0 Interest cost, 5% (46.0) Expected return on assets (52.8) Adjust for: Loss on assets 20.0…
- The Kollar Company has a defined benefit pension plan. Pension information concerning the fiscal years 2024 and 2025 are presented below ($ in millions): Information Provided by Pension Plan Actuary: a. Projected benefit obligation as of December 31, 2023 = $3,350. b. Prior service cost from plan amendment on January 2, 2024 = $650 (straight-line amortization for 10-year average remaining service period). c. Service cost for 2024 = $650. d. Service cost for 2025 = $700. e. Discount rate used by actuary on projected benefit obligation for 2024 and 2025 = 10%. f. Payments to retirees in 2024 $510. g. Payments to retirees in 2025 $580. h. No changes in actuarial assumptions or estimates. 1. Net gain-AOCI on January 1, 2024 = $375. J. Net gains and losses are amortized for 10 years in 2024 and 2025. Information Provided by Pension Fund Trustee: a. Plan asset balance at fair value on January 1, 2024 = $2,400. b. 2024 contributions $670. c. 2025 contributions $720. d. Expected long-term rate…A company had the following information concerning the operation of the company's defined-benefit pension plan for the year ended December 31, 2021. January 1, 2021 December 31, 2021Fair value of pension plan assets $33,000 $69,000Projected benefit obligation 77,000 98,000 The service cost component of pension expense for 2021 is $8,500 and the amortization of prior service cost is $400. The settlement rate is 12% and the expected rate of return is 6%. What is the amount of pension expense for 2021?Richmond Company's defined benefit pension plan had a Projected Benefit Obligation (PBO) of $250,000 on January 1, 2021. During 2021, a) Richmond paid pension benefit: of $30,000, b) the plan's discount rate was 10%; c) the plan's service cost was $95,000; and d) the plan assets increased by $70,000. What is the value of Richmond's PBO at December 31, 2021? Multiple Choice $270,000 O $340,000 O $245,000 O $410,000
