prmula for annual E umber of years in se ry, The annual bene:

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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expected to retire on December 31, 2044. The employee's
An employee was hired by the entity on January 1, 2000 and
2. -What is the projected benefit obligation after amendment
3. What is the past service cost for 2020 as a result of the
Problem 17-13 (IAA)
a
end of each year.
retirement is expected to span 21 years.
The employee's final salary at retirement is expected to be
P800,000 and the appropriate discount rate is 8%.
On January 1, 2020, the plan formula was amended by
increasing the percentage from 2% to 3%. The amendment
was made retroactive to consider past service years.
The present value of an ordinary annuity of 1 at 8% for 21
periods is 10.02 and the present value of 1 at 8% for 25 periods
is 0.15.
1. What is the projected benefit obligation before
amendment on January 1, 2020?
a. 480,960
b. 320,000
c. 160,000
d. 400,000
2. -What is the projected benefit obligation after amendment
on January 1, 2020?
a. 480,000
b. 721,440
c. 240,000
d. 320,640
amendment?
160,000
b. 120,240
а.
240,480
d.
с.
Transcribed Image Text:expected to retire on December 31, 2044. The employee's An employee was hired by the entity on January 1, 2000 and 2. -What is the projected benefit obligation after amendment 3. What is the past service cost for 2020 as a result of the Problem 17-13 (IAA) a end of each year. retirement is expected to span 21 years. The employee's final salary at retirement is expected to be P800,000 and the appropriate discount rate is 8%. On January 1, 2020, the plan formula was amended by increasing the percentage from 2% to 3%. The amendment was made retroactive to consider past service years. The present value of an ordinary annuity of 1 at 8% for 21 periods is 10.02 and the present value of 1 at 8% for 25 periods is 0.15. 1. What is the projected benefit obligation before amendment on January 1, 2020? a. 480,960 b. 320,000 c. 160,000 d. 400,000 2. -What is the projected benefit obligation after amendment on January 1, 2020? a. 480,000 b. 721,440 c. 240,000 d. 320,640 amendment? 160,000 b. 120,240 а. 240,480 d. с.
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