INTERMEDIATE ACCOUNTING
8th Edition
ISBN: 9780078025839
Author: J. David Spiceland
Publisher: McGraw-Hill Education
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Question
Chapter 17, Problem 17.2BE
To determine
Projected benefit obligation (PBO): This is the estimated present value of future retirement benefits, accumulated based on the future compensation levels.
To compute: The amount of the service cost for the year.
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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…
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…
Question 19
Tyson, Inc sponsors a defined-benefit pension plan. The following data relates to the operation of the plan for the year 2021.
Service cost
$345.000
330,000
270.000
Plan contributions
Actual return on plan assets
Projected benefit obligation January 1
Fair value of plan assets, January 1
3,600,000
2,400,000
The expected return on plan assets and the settlement rate were both 10%. The amount of pension expense reported for 2021 is:
OA$705,000
OR$465,000
Oc$435.000
OD$345.000
Chapter 17 Solutions
INTERMEDIATE ACCOUNTING
Ch. 17 - Prob. 17.1QCh. 17 - Prob. 17.2QCh. 17 - Prob. 17.3QCh. 17 - What is the vested benefit obligation?Ch. 17 - Prob. 17.5QCh. 17 - Prob. 17.6QCh. 17 - Name three events that might change the balance of...Ch. 17 - Prob. 17.8QCh. 17 - Prob. 17.9QCh. 17 - Prob. 17.10Q
Ch. 17 - The return on plan assets is the increase in plan...Ch. 17 - Define prior service cost. How is it reported in...Ch. 17 - Prob. 17.13QCh. 17 - Is a companys PBO reported in the balance sheet?...Ch. 17 - What two components of pension expense may be...Ch. 17 - Prob. 17.16QCh. 17 - Evaluate this statement: The excess of the actual...Ch. 17 - Prob. 17.18QCh. 17 - TFC Inc. revises its estimate of future salary...Ch. 17 - Prob. 17.20QCh. 17 - Prob. 17.21QCh. 17 - Prob. 17.22QCh. 17 - The components of postretirement benefit expense...Ch. 17 - Prob. 17.24QCh. 17 - Prob. 17.25QCh. 17 - Prob. 17.26QCh. 17 - Prob. 17.1BECh. 17 - Prob. 17.2BECh. 17 - Prob. 17.3BECh. 17 - Prob. 17.4BECh. 17 - Prob. 17.5BECh. 17 - Prob. 17.6BECh. 17 - Prob. 17.7BECh. 17 - Prob. 17.8BECh. 17 - Prob. 17.9BECh. 17 - Prob. 17.10BECh. 17 - Net gain LO176 The projected benefit obligation...Ch. 17 - Prob. 17.12BECh. 17 - Prob. 17.13BECh. 17 - Prob. 17.14BECh. 17 - Prob. 17.15BECh. 17 - Prob. 17.1ECh. 17 - Prob. 17.2ECh. 17 - Prob. 17.3ECh. 17 - Prob. 17.4ECh. 17 - Prob. 17.5ECh. 17 - Prob. 17.6ECh. 17 - Prob. 17.7ECh. 17 - Prob. 17.8ECh. 17 - Prob. 17.9ECh. 17 - Prob. 17.10ECh. 17 - Prob. 17.11ECh. 17 - Prob. 17.12ECh. 17 - Prob. 17.13ECh. 17 - Prob. 17.14ECh. 17 - Prob. 17.15ECh. 17 - Prob. 17.16ECh. 17 - Prob. 17.17ECh. 17 - Prob. 17.18ECh. 17 - Prob. 17.19ECh. 17 - Prob. 17.20ECh. 17 - Prob. 17.21ECh. 17 - Prob. 17.22ECh. 17 - Prob. 17.23ECh. 17 - Prob. 17.24ECh. 17 - Prob. 17.25ECh. 17 - Prob. 17.26ECh. 17 - Prob. 17.27ECh. 17 - Prob. 17.28ECh. 17 - Prob. 17.29ECh. 17 - Prob. 17.30ECh. 17 - Prob. 17.31ECh. 17 - Prob. 17.32ECh. 17 - Prob. 17.33ECh. 17 - Prob. 1CPACh. 17 - Prob. 2CPACh. 17 - Prob. 3CPACh. 17 - Prob. 4CPACh. 17 - Prob. 5CPACh. 17 - Prob. 6CPACh. 17 - Prob. 7CPACh. 17 - Prob. 8CPACh. 17 - Prob. 1CMACh. 17 - Prob. 2CMACh. 17 - Prob. 17.1PCh. 17 - Prob. 17.2PCh. 17 - Prob. 17.3PCh. 17 - Prob. 17.4PCh. 17 - Prob. 17.5PCh. 17 - Prob. 17.6PCh. 17 - Prob. 17.7PCh. 17 - Prob. 17.8PCh. 17 - Prob. 17.9PCh. 17 - Prob. 17.10PCh. 17 - Prob. 17.11PCh. 17 - Prob. 17.12PCh. 17 - Prob. 17.13PCh. 17 - Prob. 17.14PCh. 17 - Prob. 17.15PCh. 17 - Prob. 17.16PCh. 17 - Prob. 17.17PCh. 17 - Prob. 17.18PCh. 17 - Prob. 17.19PCh. 17 - Prob. 17.20PCh. 17 - Prob. 17.21PCh. 17 - Prob. 17.1BYPCh. 17 - Prob. 17.2BYPCh. 17 - Prob. 17.3BYPCh. 17 - Prob. 17.5BYPCh. 17 - Prob. 17.6BYPCh. 17 - Prob. 17.8BYPCh. 17 - Prob. 17.9BYPCh. 17 - Prob. 17.10BYPCh. 17 - Prob. 17.12BYPCh. 17 - Prob. 1AFKC
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- Problem 17-2 (Algo) PBO calculations; present value concepts [LO17-3] Sachs Brands's defined benefit pension plan specifies annual retirement benefits equal to 1.4% × service years × final year's salary, payable at the end of each year. Angela Davenport was hired by Sachs at the beginning of 2007 and is expected to retire at the end of 2041 after 35 years' service. Her retirement is expected to span 18 years. Davenport's salary is $92,000 at the end of 2021 and the company's actuary projects her salary to be $290,000 at retirement. The actuary's discount rate is 6%. (FV of $1, PV of $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD of $1) (Use appropriate factor(s) from the tables provided.) Required:2. Estimate by the projected benefits approach the amount of Davenport's annual retirement payments earned as of the end of 2021.3. What is the company's projected benefit obligation at the end of 2021 with respect to Davenport? (Do not round intermediate calculations. Round your final answer…arrow_forwardProblem 17-6 (Algo) 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 5% as the appropriate discount rate. The service cost is $140,000 for 2021 and $220,000 for 2022. Year-end funding is $150,000 for 2021 and $160,000 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…arrow_forwardChoices 0 900 000 1 700 000 2 210 000arrow_forward
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- Question 9 Oriole Company provides the following information about its defined benefit pension plan for the year 2020. Service cost $91,700 Contribution to the plan 104,300 Prior service cost amortization 10,800 Actual and expected return on plan assets 65,300 Benefits paid 39,700 Plan assets at January 1, 2020 633,400 Projected benefit obligation at January 1, 2020 711,600 Accumulated OCI (PSC) at January 1, 2020 148,000 Interest/discount (settlement) rate 10 % General Journal Entries Memo Record Items AnnualPension Expense Cash OCIPrior Service Cost Pension Asset/Liability Projected BenefitObligation PlanAssets (b) The parts of this question must be completed in order. This part will be available when you complete the part above.arrow_forwardSh12 Please help mearrow_forward3arrow_forward
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