Indicate by letter whether each of the events listed below increase (l), decreases (D), or has no effect (N) on an employer’s projected benefit obligation.                                                                               Events Interest cost.                                                                                                                  ________ Amortization of prior service cost.                                                                                 ________ A decrease in the average life expectancy of employees.                                             ________ An increase in the average life expectancy of employees.                                         ________ A plan amendment that increases benefits is made retroactive to prior years.             ________ An increase in the actuary’s assumed discount rate.                                                     ________ Cash contributions to the pension fund by the employer.                                               ________ Benefits are paid to retired employees.                                                                             ________ Service cost.                                                                                                                      ________ Return on plan assets during the year are lower than expected.                                       ________ Return on plan assets during the year are higher than expected

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 1MC: The actuarial present value of all the benefits attributed by the pension benefit formula to...
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Indicate by letter whether each of the events listed below increase (l), decreases (D), or has no effect (N) on an employer’s projected benefit obligation.

 

                                                                            Events

  1. Interest cost.                                                                                                                  ________
  2. Amortization of prior service cost.                                                                                 ________
  3. A decrease in the average life expectancy of employees.                                             ________
  4. An increase in the average life expectancy of employees.                                         ________
  5. A plan amendment that increases benefits is made retroactive to prior years.             ________
  6. An increase in the actuary’s assumed discount rate.                                                     ________
  7. Cash contributions to the pension fund by the employer.                                               ________
  8. Benefits are paid to retired employees.                                                                             ________
  9. Service cost.                                                                                                                      ________
  10. Return on plan assets during the year are lower than expected.                                       ________
  11. Return on plan assets during the year are higher than expected.                                      ________
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