is expec actuary

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 1E
icon
Related questions
Question
Sachs Brands's defined benefit pension plan specifies annual retirement benefits equal to 1.4% x
service years x 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 $82,000 at the end of 2021 and
the company's actuary projects her salary to be $240,0o00 at retirement. The actuary's discount rate
is 8%. (FV of $1, PV of $1, FVA of $1, PVA of S1, FVAD of $1 and PVAD of $1) (Use appropriate factor(s)
from the tables provided.)
Required:
2. Estimate by the accumulated benefits approach the amount of Davenport's annual retirement
payments earned as of the end of 2021.
3. What is the company's accumulated benefit obligation at the end of 2021 with respect to
Davenport? (Do not round intermediate calculations. Round your final answer to the nearest whole
dollar.)
4. If no estimates are changed in the meantime, what will be the accumulated benefit obligation at
the end of 2024 (three years later), when Davenport's salary is S90,000? (Do not round intermediate
calculations. Round your final answer to the nearest whole dollar.)
Please answer in this table format
2. Annual Retirement Payments
3. Accumulated Benefit Obligation 2021
4. Accumulated Benefit Obligation 2024
Transcribed Image Text:Sachs Brands's defined benefit pension plan specifies annual retirement benefits equal to 1.4% x service years x 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 $82,000 at the end of 2021 and the company's actuary projects her salary to be $240,0o00 at retirement. The actuary's discount rate is 8%. (FV of $1, PV of $1, FVA of $1, PVA of S1, FVAD of $1 and PVAD of $1) (Use appropriate factor(s) from the tables provided.) Required: 2. Estimate by the accumulated benefits approach the amount of Davenport's annual retirement payments earned as of the end of 2021. 3. What is the company's accumulated benefit obligation at the end of 2021 with respect to Davenport? (Do not round intermediate calculations. Round your final answer to the nearest whole dollar.) 4. If no estimates are changed in the meantime, what will be the accumulated benefit obligation at the end of 2024 (three years later), when Davenport's salary is S90,000? (Do not round intermediate calculations. Round your final answer to the nearest whole dollar.) Please answer in this table format 2. Annual Retirement Payments 3. Accumulated Benefit Obligation 2021 4. Accumulated Benefit Obligation 2024
Expert Solution
steps

Step by step

Solved in 2 steps

Blurred answer
Knowledge Booster
Depletions and Amortizations
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.
Recommended textbooks for you
Intermediate Accounting: Reporting And Analysis
Intermediate Accounting: Reporting And Analysis
Accounting
ISBN:
9781337788281
Author:
James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:
Cengage Learning
CONCEPTS IN FED.TAX., 2020-W/ACCESS
CONCEPTS IN FED.TAX., 2020-W/ACCESS
Accounting
ISBN:
9780357110362
Author:
Murphy
Publisher:
CENGAGE L
SWFT Individual Income Taxes
SWFT Individual Income Taxes
Accounting
ISBN:
9780357391365
Author:
YOUNG
Publisher:
Cengage
Individual Income Taxes
Individual Income Taxes
Accounting
ISBN:
9780357109731
Author:
Hoffman
Publisher:
CENGAGE LEARNING - CONSIGNMENT
SWFT Comprehensive Vol 2020
SWFT Comprehensive Vol 2020
Accounting
ISBN:
9780357391723
Author:
Maloney
Publisher:
Cengage
SWFT Comprehensive Volume 2019
SWFT Comprehensive Volume 2019
Accounting
ISBN:
9780357233306
Author:
Maloney
Publisher:
Cengage