Hicks Cable Company has a defined benefit pension plan. Three alternative possibilities for pension-related dataat January 1, 2016, are shown below:($ in 000s)Case 1Case 2Case 3$ (330)(8)16(2,550)(2,670)2,700Net loss (gain)-AOCI, Jan. 12016 loss (gain) on plan assets2016 loss (gain) on PBOAccumulated benefit obligation, Jan. 1Projected benefit obligation, Jan. 1Fair value of plan assets, Jan. 1Average remaining service periodof active employees (years)$ 320$ 260(11)(23)(2,950)(265)(1,450)(1,700)1,550(3,310)2,800121510Required:1. For each independent case, calculate any amortization of the net loss or gain that should be included as acomponent of pension expense for 2016.2. For each independent case, determine the net loss-AOCI or net gain-AOCI as of January 1, 2017.

Case 1: Net loss (gain) = $320 Corridor = $331 So, no excess no amortisation Case 2: Net loss (gain)…

Answered: Hicks Cable Company has a defined…

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 4E

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Hicks Cable Company has a defined benefit pension plan. Three alternative possibilities for pension-related data at January 1, 2024, are shown below: ($ in thousands) Net loss (gain)—AOCI, January 1 $ 324 $ (340) 270 2024 loss (gain) on plan assets (15) (12) 6 2024 loss (gain) on PBO (27) 20 (275) Accumulated benefit obligation, January 1 (2,990) (2,590) (1,490) Projected benefit obligation, January 1 (3,350) (2,710) (1,740) Fair value of plan assets, January 1 2,840 2,740 1,590 Average remaining service period of active employees (years) 10 11 8 Required: For each independent case, calculate any amortization of the net loss or gain that should be included as a component of pension expense for 2024. For each independent case, determine the net loss—AOCI or net gain—AOCI as of January 1, 2025.
Hicks Cable Company has a defined benefit pension plan. Three alternative possibilities for pension-related data at January 1, 2021, are shown below: ($ in thousands) Case 1 Case 2 Case 3 Net loss (gain)—AOCI, Jan. 1 $ 335 $ (397 ) $ 305 2021 loss (gain) on plan assets (26 ) (23 ) 5 2021 loss (gain) on PBO (38 ) 31 (310 ) Accumulated benefit obligation, Jan. 1 (3,100 ) (2,700 ) (1,600 ) Projected benefit obligation, Jan. 1 (3,460 ) (2,820 ) (1,850 ) Fair value of plan assets, Jan. 1 2,950 2,850 1,700 Average remaining service periodof active employees (years) 12 14 10 Required:1. For each independent case, calculate any amortization of the net loss or gain that should be included as a component of pension expense for 2021.2. For each independent case, determine the net loss—AOCI or net gain—AOCI as of January 1, 2022.
Baron Company adopted a defined benefit pension plan on January 1, 2018. The following information pertains to the pension plan for 2019 and 2020: 2019 2020 Service cost $150,000 $160,000 Projected benefit obligation (1/1) 112,500 269,250 Plan assets (1/1) 112,500 273,750 Company contribution (funded 12/31) 154,500 170,000 Discount rate 6% 6% Expected long-term (and actual) rate of return on plan assets 6% 6% There are no other components of Baron’s pension expense. Required: 1. Compute the amount of Baron’s pension expense for 2019 and 2020. 2. Prepare the journal entries to record the pension expense for 2019 and 2020.
Foster Corporation received the following report from its actuary at the end of the year: December 31, 2014 December 31, 2015 Projected benefit obligation $2,000,000 $2,200,000 Accumulated benefit obligation 1,380,000 1,440,000 Fair value of pension plan assets 1,300,000 1,480,000 The amount reported as the pension liability at December 31, 2014 is a. 0 b. 80,000 c. 620,000 d. 700,000 The amount reported at the pension liability at December 31, 2015 is a. 2,200,000 b. 1,480,000 c. 720,000 d. 760,000
Use the following information for questions 4 through 6. The following data are for the pension plan for the employees of Lockett Company. 1/1/1412/31/1412/31/15 Accumulated benefit obligation $2,500,000 $2,600,000 $3,400,000 Projected benefit obligation 2,700,000 2,800,000 3,700,000 Plan assets (at fair value) 2,300,000 3,000,000 3,300,000 AOCL – net loss -0- 580,000 500,000 Settlement rate (for year) 10% 9% Expected rate of return (for year) 8% 7% Lockett’s contribution was $420,000 in 2015 and benefits paid were $275,000. Lockett estimates that the average remaining service life is 20 years. 4.The actual return on plan assets in 2015 was a. $300,000. b. $255,000. c. $200,000. d. $155,000. 5.Assume that the actual return on plan assets in 2015 was $245,000. The unexpected gain on plan assets in 2015 was a. $32,000. b. $55,000. c. $35,000. d. $34,000. 6.The corridor for 2015 was $300,000. The amount of AOCI-net loss amortized in 2015 was a. $33,333. b. $32,000. c. $14,000.…
Rosaria Co. sponsors a defined benefit pension plan. For the current year ended December 31, thefollowing information relevant to the plan has been accumulated:Defined benefit obligation, 1/1 P11,250,000Fair value of plan assets, 1/1 10,500,000Current service cost 1,050,000Past service cost 2,200,000Actual return on plan assets 600,000Decrease in defined benefit obligation due tochanges in actuarial assumptions300,000Discount rate 8%Requirements:1. In the working papers computations, what balance of plan assets will be determined?2. In the working papers computations, what balance of benefit obligation will be determined?3. Calculate the amount that the entity would recognize in profit or loss for the year in accordancewith the revised PAS 19.4. Calculate the amount that the entity would recognize in other comprehensive income for theyear in accordance with the revised PAS 19.
4) Electronic Distribution has a defined benefit pension plan. Characteristics of the plan during 2021 are as follows: ($ millions) PBO balance, January 1 $ 480 Plan assets balance, January 1 350 Service cost 75 Interest cost 45 Gain from change in actuarial assumption 26 Benefits paid (36 ) Actual return on plan assets 23 Contributions 2021 65 The expected long-term rate of return on plan assets was 8%. There were no AOCI balances related to pensions on January 1, 2021, but at the end of 2021, the company amended the pension formula, creating a prior service cost of $13 million. (Enter your answers in millions (i.e., 10,000,000 should be entered as 10).) Required: 1. Calculate the pension expense for 2021.2. Prepare the journal entries to record (a) pension expense, (b) gains or losses, (c) prior service cost, (d) funding, and (e) payment of benefits for 2021.3. What amount will Electronic Distribution report in…
Pension data for Sterling Properties include the following: ($ in thousands) Service cost, 2024 $ 116 Projected benefit obligation, January 1, 2024 550 Plan assets (fair value), January 1, 2024 600 Prior service cost—AOCI (2024 amortization, $7) 86 Net loss—AOCI (2024 amortization, $2) 107 Interest rate, 6% Expected return on plan assets, 10% Actual return on plan assets, 11% Required: Assume Sterling Properties prepares its financial statements according to International Financial Reporting Standards (IFRS). The interest rate on high-grade corporate bonds is 6%. Determine the net pension cost. Note: Enter your answer in thousands (i.e., 10,000 should be entered as 10).
TKE Corporation established a defined benefit pension plan in 2016. TKE has provided the following information for the year ended December 31, 20X1: Service cost $ 90,000 Interest cost $ 120,000 Actual return on plan assets $ 70,000 Expected return on plan assets $ 80,000 Amortization of prior service costs $ 30,000 If the company contributes $130,000 cash to the pension plan trustee, which one of the following journal entries properly records the payment? Multiple Choice DR Pension expense 90,000 DR Pension asset (liability) 40,000 CR Cash 130,000 DR Pension expense 120,000 DR Pension asset 10,000 CR Cash 130,000 DR Pension expense 130,000 CR Cash 130,000 DR Pension expense 160,000 CR Cash 130,000 CR Pension asset (liability) 30,000
The following pension-related data pertain to Metro Recreation's noncontributory, defined benefit pension plan for 2021: ($ in 000s) Jan. 1 Dec. 31 Projected benefit obligation $ 4,300 $ 4,580 Accumulated benefit obligation 3,725 3,970 Plan assets (fair value) 4,830 5,275 Interest (discount) rate, 9% Expected return on plan assets, 10% Prior service cost—AOCI (from Dec. 31, 2020, amendment) 860 Net loss—AOCI 503 Average remaining service life: 10 years Gain due to changes in actuarial assumptions 42 Contributions to pension fund (end of year) 360 Pension benefits paid (end of year) 315 Required:Prepare a pension spreadsheet that shows the relationships among the various pension balances, shows the changes in those balances, and computes pension expense for 2021. (Enter credit amounts with a minus sign and debit amounts…
Penben Corporation has a defi ned benefi t pension plan. At 31 December, its pension obligation is €10 million and pension assets are €9 million. Under either IFRS or US GAAP,the reporting on the balance sheet would be closest to which of the following?A . €10 million is shown as a liability, and €9 million appears as an asset.B . €1 million is shown as a net pension obligation.C . Pension assets and obligations are not required to be shown on the balance sheet butonly disclosed in footnotes.
Caroni Ltd has a defined benefit pension plan for its employees. In 2016, the following actuarial report was received for the defined benefit plan:2016/$Present value of the defined benefit obligation 31 December 201510 000 000Net interest?Current service cost1 150 000Benefits paid1 200 000Actuarial gain/loss on DBO?Present value of the defined benefit obligation 31 December 201610 750 000Fair value of plan assets at 31 December 20159 500 000Return on plan assets?Contributions paid to the plan during the year1 000 000Benefits paid by the plan during the year1 200 000Fair value of plan assets at 31 December 201610 047 500Additional information(a) All contributions received by the plan were paid by Caroni Ltd.(b) The interest rate used to measure the present value of the defined benefit obligation was 9% at 31 December 2015 and 31 December 2016.(c) The asset ceiling was nil at 31 December 2015 and 31 December 2016.Requirements:a) Determine the surplus or deficit of Caroni Ltd.’s defined…

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