Projected benefit obligation (PBO) : This is the estimated present value of future retirement benefits, accumulated based on the future compensation levels. To determine : PBO as at December 31, 2018 for L Industries

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Answer 1

Question

Chapter 17, Problem 17.13P

(1)

To determine

Projected benefit obligation (PBO): This is the estimated present value of future retirement benefits, accumulated based on the future compensation levels.

To determine: PBO as at December 31, 2018 for L Industries

(2)

To determine

Plan assets: The assets which are used to satisfy the postretirement obligation, are held as a pension fund by the trustee, to invest the employer contributions, accumulate the earnings on investments, and pay the contributions plus earnings to the retired employees, are referred to as plan assets.

To determine: Plan assets as at December 31, 2018 for L Industries

(3)

To determine

Pension expense: Pension expense is an expense to the employer paid as compensation after the completion of services performed by the employees.

Pension expense includes the following components:

Service cost

Interest cost

Expected return on plan assets

Amortization of prior service cost

Amortization of net loss or net gain

To determine: Pension expense as at December 31, 2018 for L Industries

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Problem 17-6 (Static) Determine the PBO; plan assets; pension expense; two years [LO17-3, 17-4, 17-6] Stanley-Morgan Industries adopted a defined benefit pension plan on April 12, 2021. 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 2021 and 2022.* A consulting firm, engaged as actuary, recommends 6% as the appropriate discount rate. The service cost is $150,000 for 2021 and $200,000 for 2022. Year-end funding is $160,000 for 2021 and $170,000 for 2022. No assumptions or estimates were revised during 2021. * 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 2022. Required: Calculate each of the following amounts as of both December 31, 2021, and December 31, 2022: (Enter your answers In…

Answer 2

Question

Chapter 17, Problem 17.13P

(1)

To determine

Projected benefit obligation (PBO): This is the estimated present value of future retirement benefits, accumulated based on the future compensation levels.

To determine: PBO as at December 31, 2018 for L Industries

(2)

To determine

Plan assets: The assets which are used to satisfy the postretirement obligation, are held as a pension fund by the trustee, to invest the employer contributions, accumulate the earnings on investments, and pay the contributions plus earnings to the retired employees, are referred to as plan assets.

To determine: Plan assets as at December 31, 2018 for L Industries

(3)

To determine

Pension expense: Pension expense is an expense to the employer paid as compensation after the completion of services performed by the employees.

Pension expense includes the following components:

Service cost

Interest cost

Expected return on plan assets

Amortization of prior service cost

Amortization of net loss or net gain

To determine: Pension expense as at December 31, 2018 for L Industries

Expert Solution & Answer

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Answer 3

Question

Chapter 17, Problem 17.13P

(1)

To determine

Projected benefit obligation (PBO): This is the estimated present value of future retirement benefits, accumulated based on the future compensation levels.

To determine: PBO as at December 31, 2018 for L Industries

(2)

To determine

Plan assets: The assets which are used to satisfy the postretirement obligation, are held as a pension fund by the trustee, to invest the employer contributions, accumulate the earnings on investments, and pay the contributions plus earnings to the retired employees, are referred to as plan assets.

To determine: Plan assets as at December 31, 2018 for L Industries

(3)

To determine

Pension expense: Pension expense is an expense to the employer paid as compensation after the completion of services performed by the employees.

Pension expense includes the following components:

Service cost

Interest cost

Expected return on plan assets

Amortization of prior service cost

Amortization of net loss or net gain

To determine: Pension expense as at December 31, 2018 for L Industries

Expert Solution & Answer

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Answer 4

Question

Chapter 17, Problem 17.13P

(1)

To determine

Projected benefit obligation (PBO): This is the estimated present value of future retirement benefits, accumulated based on the future compensation levels.

To determine: PBO as at December 31, 2018 for L Industries

(2)

To determine

Plan assets: The assets which are used to satisfy the postretirement obligation, are held as a pension fund by the trustee, to invest the employer contributions, accumulate the earnings on investments, and pay the contributions plus earnings to the retired employees, are referred to as plan assets.

To determine: Plan assets as at December 31, 2018 for L Industries

(3)

To determine

Pension expense: Pension expense is an expense to the employer paid as compensation after the completion of services performed by the employees.

Pension expense includes the following components:

Service cost

Interest cost

Expected return on plan assets

Amortization of prior service cost

Amortization of net loss or net gain

To determine: Pension expense as at December 31, 2018 for L Industries

Expert Solution & Answer

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Answer 5

Chapter 17, Problem 17.13P

(1)

To determine

Projected benefit obligation (PBO): This is the estimated present value of future retirement benefits, accumulated based on the future compensation levels.

To determine: PBO as at December 31, 2018 for L Industries

(2)

To determine

Plan assets: The assets which are used to satisfy the postretirement obligation, are held as a pension fund by the trustee, to invest the employer contributions, accumulate the earnings on investments, and pay the contributions plus earnings to the retired employees, are referred to as plan assets.

To determine: Plan assets as at December 31, 2018 for L Industries

(3)

To determine

Pension expense: Pension expense is an expense to the employer paid as compensation after the completion of services performed by the employees.

Pension expense includes the following components:

Service cost

Interest cost

Expected return on plan assets

Amortization of prior service cost

Amortization of net loss or net gain

To determine: Pension expense as at December 31, 2018 for L Industries

Answer 6

Chapter 17, Problem 17.13P

(1)

To determine

Projected benefit obligation (PBO): This is the estimated present value of future retirement benefits, accumulated based on the future compensation levels.

To determine: PBO as at December 31, 2018 for L Industries

Answer 7

Chapter 17, Problem 17.13P

(1)

To determine

Projected benefit obligation (PBO): This is the estimated present value of future retirement benefits, accumulated based on the future compensation levels.

To determine: PBO as at December 31, 2018 for L Industries

Answer 8

(2)

To determine

Plan assets: The assets which are used to satisfy the postretirement obligation, are held as a pension fund by the trustee, to invest the employer contributions, accumulate the earnings on investments, and pay the contributions plus earnings to the retired employees, are referred to as plan assets.

To determine: Plan assets as at December 31, 2018 for L Industries

Answer 9

(2)

To determine

Plan assets: The assets which are used to satisfy the postretirement obligation, are held as a pension fund by the trustee, to invest the employer contributions, accumulate the earnings on investments, and pay the contributions plus earnings to the retired employees, are referred to as plan assets.

To determine: Plan assets as at December 31, 2018 for L Industries

Answer 10

(3)

To determine

Pension expense: Pension expense is an expense to the employer paid as compensation after the completion of services performed by the employees.

Pension expense includes the following components:

Service cost

Interest cost

Expected return on plan assets

Amortization of prior service cost

Amortization of net loss or net gain

To determine: Pension expense as at December 31, 2018 for L Industries

Answer 11

(3)

To determine

Pension expense: Pension expense is an expense to the employer paid as compensation after the completion of services performed by the employees.

Pension expense includes the following components:

Service cost

Interest cost

Expected return on plan assets

Amortization of prior service cost

Amortization of net loss or net gain

To determine: Pension expense as at December 31, 2018 for L Industries

Answer 12

Expert Solution & Answer

Answer 13

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Answer 14

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Answer 15

Ch. 17 - Prob. 17.1Q Ch. 17 - Prob. 17.2Q Ch. 17 - Prob. 17.3Q Ch. 17 - What is the vested benefit obligation?Ch. 17 - Prob. 17.5Q Ch. 17 - Prob. 17.6Q Ch. 17 - Name three events that might change the balance of...Ch. 17 - Prob. 17.8Q Ch. 17 - Prob. 17.9Q Ch. 17 - Prob. 17.10Q

Projected benefit obligation (PBO) : This is the estimated present value of future retirement benefits, accumulated based on the future compensation levels. To determine : PBO as at December 31, 2018 for L Industries

Solution Summary: The author explains Projected Benefit Obligation (PBO) as the estimated present value of future retirement benefits, accumulated based on the future compensation levels.

Concept explainers

Projected benefit obligation (PBO): This is the estimated present value of future retirement benefits, accumulated based on the future compensation levels.

To determine: PBO as at December 31, 2018 for L Industries

Want to see the full answer?

Chapter 17 Solutions

Projected benefit obligation (PBO) : This is the estimated present value of future retirement benefits, accumulated based on the future compensation levels. To determine : PBO as at December 31, 2018 for L Industries

Solution Summary: The author explains Projected Benefit Obligation (PBO) as the estimated present value of future retirement benefits, accumulated based on the future compensation levels.

Concept explainers

Projected benefit obligation (PBO): This is the estimated present value of future retirement benefits, accumulated based on the future compensation levels. To determine: PBO as at December 31, 2018 for L Industries

Want to see the full answer?

Chapter 17 Solutions

Projected benefit obligation (PBO): This is the estimated present value of future retirement benefits, accumulated based on the future compensation levels.

To determine: PBO as at December 31, 2018 for L Industries