10. Newton Inc offers its employees a defined benefit pension plan. Newton Inc reports under US GAAP. It recordsactuarial gains and losses in Other Comprehensive Income (OCI) and amortizes these amounts over theaverage remaining service life of its employees when they exceed a threshold. Newton Inc did not record anypast service cost in fiscal year 2021.Below you can find excerpts from Newton's pension footnotes:4+1fService costInterest costExpected return on plan assetsActual return on plan assetsContributions to defined benefits planBenefits paidPension liabilityAccumulated OCI losses related to defined benefit plansa. £6,950b. £6,600c. £6,250d. £8,150e. None of the above2020£3,300£1,600£2,100£1,900£2,000£1,250What is your best approximation of the net pension expenses recorded in P&L related to defined benefit plansin fiscal year 2021?ANSWER: C£35,000£4,5002021£3,500£1,750£1,900£2,000£2,100£1,350£42,500£5,100

The net pension expense recorded in the Profit & Loss (P&L) statement related to defined…

Answered: What is your best approximation of the…

What is your best approximation of the net pension expenses recorded in P&L related to defined benefit plans in fiscal year 2021? a. £6,950 b. £6,600 c. £6,250 d. £8,150 e. None of the above

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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Concept explainers

Employee Benefits

In an organization employees are the most important resource and most important asset. They can lead an organization to the sky or can be the reason for unsuccessful of business. Therefore, it is very much important that employees of an organization should be satisfied by the environment of the organization and most importantly with the salary, wages incentives, etc.

Question

10. Newton Inc offers its employees a defined benefit pension plan. Newton Inc reports under US GAAP. It records
actuarial gains and losses in Other Comprehensive Income (OCI) and amortizes these amounts over the
average remaining service life of its employees when they exceed a threshold. Newton Inc did not record any
past service cost in fiscal year 2021.
Below you can find excerpts from Newton's pension footnotes:
4+1
f
Service cost
Interest cost
Expected return on plan assets
Actual return on plan assets
Contributions to defined benefits plan
Benefits paid
Pension liability
Accumulated OCI losses related to defined benefit plans
a. £6,950
b. £6,600
c. £6,250
d. £8,150
e. None of the above
2020
£3,300
£1,600
£2,100
£1,900
£2,000
£1,250
What is your best approximation of the net pension expenses recorded in P&L related to defined benefit plans
in fiscal year 2021?
ANSWER: C
£35,000
£4,500
2021
£3,500
£1,750
£1,900
£2,000
£2,100
£1,350
£42,500
£5,100

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