In a recent year’s financial statements, Procter & Gamble showed an unfunded pension liability of $5,599 million and a periodic pension cost of $434 million.Explain the meaning of the $5,599 million unfunded pension liability and the$434 million periodic pension cost.

In a recent year’s financial statements, Procter & Gamble showed an unfunded pension liability of $5,599 million and a periodic pension cost of $434 million.Explain the meaning of the $5,599 million unfunded pension liability and the$434 million periodic pension cost.

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 7RE

See similar textbooks

Related questions

Q: ABC Company provided the following information for the current year: Projected Benefit Obligation,…

A: Interest costs = Projected Benefit Obligation, January 1 x discount rate = 3500000 x 10% = 350,000

Q: At the end of the current period, Agler Inc. had a projected benefit obligation of $400,000 and…

Q: At the beginning of the current year, the memorandum records of OPPA Co's defined benefit plan…

A: Defined benefit obligation is a measurement of present values to determine liabilities for future…

Q: Hudson Company's actuary has provided the following information concerning the company's defined…

A: Given; Fair value of plant assets: $350,000 Expected project benefit obligation: $424,000 Actual…

Q: For the current year, a company with a DB pension plan has service cost $106,000; benefits paid…

A: Defined benefit pension plans are the retirement designs that include providing a fixed and…

Q: U.S. Metallurgical Inc. reported the following balances in its financial statements and disclosure…

A: As posted multiple sub parts questions we are answering only first three kindly repost the…

Q: Under the defined-benefit pension plan for a company, the expected return on plan assets is $124,000…

A: Ans. Where any differences occurs between the actual return on plan assets and expected returns on…

Q: At the end of the current year, Top Co. has a defined benefit obligation of £335,000 and pension…

A: Pension Fund The purpose of creating the pension fund is to some of the small portion of amount…

Q: The accountant for Serenity Ltd. has provided the following information for the company’s defined…

A: NOTE : As per BARTLEBY guidelines, when multiple questions are given, then first question is to be…

Q: ABC Company provided the following information for the current year: · Projected Benefit…

A: Interest costs = Projected Benefit Obligation, January 1 x discount rate = 3500000 x 10% = 350,000

Q: Pension data for the Ben Franklin Company include the following for the current calendar year:…

A: Journal: Recording of a business transactions in a chronological order.

Q: At the end of the current period, JAG Co. has a defined benefit obligation of €125,000 and pension…

A: Amount of pension plan = Beginning defined benefit obligation - amount of the vested benefit for the…

Q: The following information is related to the pension plan of B, Inc. for 2016. Actual return on plan…

A: Service cost 800,000 Interest on defined benefit obligation 326500 net gain on liability -82500…

Q: For the current year, Clark Company has the following information. Beginning plan assets was $1,000,…

A: Defined Pension Obligation Defined pension obligation which is described as implemented scheme to…

Q: he PBO was $100 million at the beginning of the year and $106 million at the end of the year.…

A: Defined benefit plans are schemes and plans made by company for the benefit of employees in the…

Q: On January 1, 2017, Roca Co. has the following balances: Projected benefit obligation $3,730,000…

A: The present amount required by an entity to fulfill the pension obligations relating to the future…

Q: Maines Company provides the following information about its defined benefit pension plan for the…

A: Pension: It is the periodic payment made to the retired employee to support their retirement plan.

Q: The following information for Cooper Enterprises is given below: December 31, 2015 Assets and…

A: Pension liability refers to the kind of fund which has the projected debts that exceeds the present…

Q: At December 31, 2017, Besler Corporation had a projected benefit obligation of $560,000, plan assets…

A: Pension asset: A pension asset is the funds of a company which is used to meet their future…

Q: For Skysong Corporation, year-end plan assets were $ 2,000,000. At the beginning of the year, plan…

A: Formula: Return on plan Assets = Ending plan Assets - Beginning plan Assets - Contributions +…

Q: For Warren Corporation, year-end plan assets were $2,000,000. At the beginning of the year, plan…

Q: For Windsor Corporation, year-end plan assets were $1,999,000. At the beginning of the year, plan…

A: Increase in plan assets = Ending plan assets - beginning plan assets =$1,999,000-1,773,000 =…

Q: The Pension Expense in a pension plan for the year were recorded at $856,800. In addition, an amount…

A: Under ASPE, The amount of pension expense that company will record is the pension expense which…

Q: ation received the following report from its actuary at the end of the year: December 31, 2014…

A: Pension liability refers to the concept of evaluating the difference between the actual amount due…

Q: Boey Company reported net income of $25,000 in 2021. It had the following amounts related to its…

A: Pension: A fixed sum of money, receivable in future or after the age of retirement, which the…

Q: For Stubby Corporation, year-end plan assets were P2, 000,000. At the beginning of the year, plan…

A: Actual return on plan assets = Ending balance of plan assets - Beginning balance of plan assets +…

Q: Harvey Hotels has provided a defined benefit pension plan for its employees for several years. At…

A: Pension expense for the Year = Service costs + Interest costs + Amortization of prior service cost -…

Q: Pension data for Millington Enterprises include the following: (S in millions) Discount rate, 10%…

A: Interest cost = Projected benefit obligation at the beginning of the year x Discount rate = $360…

Q: The following information relates to Hatami Company's defined benefit pension plan during the…

A: Plan assets end of the year = Plan assets beginning of the year + Actual return on plan assets +…

Q: Projected benefit obligation 700,000 Other Items Pension asset / liability, January 1, 2015 20,000…

A: Given Plan assets (at fair value) $400,000 And Contributions 250,000

Q: On January 1, 2017, Makoto Co. has the following balances: Projected benefit obligation $2,730,000…

Q: The Warren Group’s pension cost is $67 million. This amount includes a $70 million service cost, a…

A: Pension expense: Pension expense is an expense to the employer paid as compensation after the…

Q: On January 1, 2017, Makoto Co. has the following balances: Projected benefit obligation $2,730,000…

A: SOLUTION- NOTE= IN THAT QUESTION NOTHING IS ASKED WHAT TO CALCULATE . ACCORDING TO QUESTION I…

Q: Presented below is pension information for A Company for the year 2016: Interest on plan assets…

A: The expenses incurred in the organisation have the debit balance.

Q: PQR Company provided the following information for the current year: · Projected Benefit…

A: The current service cost is the employee expenses incurred for the current year. Computation of…

Q: What is the pension expense at the end of 2021? What is the projected benefit obligation at the end…

A: Since you have posted a question with multiple sub-parts, we will solve first three subparts for…

Q: Presented below is information related to the pension plan of Ivanhoe Inc. for the year 2021. 1.…

A: Given the following information: Service cost related to pension expense: $233,000 Projected…

Q: JDS Shipyard's projected benefit obligation, accumulated benefit obligation, and plan assets were…

A: a.

Q: JDS Shipyard’s projected benefit obligation, accumulated benefit obligation, and plan assets were…

A: Calculation of pension liability: Particulars Amount Projected benefit obligation $40 million…

Q: At the end of the current year, Joshua Co. has a defined benefit obligation of $335,000 and pension…

A: Joshua Co. would report a pension asset of $10,000 ($345,000 – $335,000).

Q: At the end of the current year, Kennedy Co. has a defined benefit obligation of $335,000 and pension…

A: Difference between defined benefit obligation and fair value of plan assets is reported on balance…

Q: Nevada, Inc. reported the following items in the 2017 pension footnote (in millions). Service cost…

A: Pension obligation of the business means liabilities in relation with payment of benefits to…

Concept explainers

Employee Benefits

In an organization employees are the most important resource and most important asset. They can lead an organization to the sky or can be the reason for unsuccessful of business. Therefore, it is very much important that employees of an organization should be satisfied by the environment of the organization and most importantly with the salary, wages incentives, etc.

Question

In a recent year’s financial statements, Procter & Gamble showed an unfunded pension liability of $5,599 million and a periodic pension cost of $434 million.
Explain the meaning of the $5,599 million unfunded pension liability and the
$434 million periodic pension cost.

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

This is a popular solution!

SEE SOLUTION Check out a sample Q&A here

Step 1

VIEW

Step 2

VIEW

Trending now

This is a popular solution!

Step by step

Solved in 2 steps

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Accounting for Employee Compensations and Benefits

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.

Similar questions

Pinecone Company has plan assets of 500,000 at the beginning of the current year and expects to earn 12% on its plan assets during the year. Pinecones service cost is 230,000, and its interest cost is 55,000. Compute Pine-cones pension expense for the current year.
Given the following information for Tyler Companys pension plan at the beginning of the year, calculate the corridor, excess net loss (gain), and amortized net loss (gain). Assume an average remaining service life of 15 years.
At the end of the current period, Agler Inc. had a projected benefit obligation of $400,000 and pension plan assets (at fair value) of $350,000. What are the accounts and amounts that will be reported on the company's balance sheet as pension assets or pension liabilities?
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
Babcock Company received the following reports of its defined benefit pension plan for the current calendar year: PBO Plan assets Balance, January 1 $ 600,000 Balance, January 1 $ 500,000 Service cost 360,000 Actual return 50,000 Interest cost 64,000 Annual contribution 220,000 Benefits paid (90,000) Benefits paid (90,000) Balance, December 31 $ 934,000 Balance, December 31 $ 680,000 The long-term expected rate of return on plan assets is 8%. Assuming no other data are relevant, what is the pension expense for the year?
The following information is related to the defined benefit pension plan of Xavier Company for 2012: Service cost $60,000 Contributions to pension plan 142,400 Benefits paid to retirees 150,000 Plan assets (fair value), January 1 740,000 Plan assets (fair value), December 31 850,000 Unamortized Prior Service Cost, January 1 160,000 Unamortized Prior Service Cost, December 31 110,000 Actual return on plan assets 150,000 PBO, January 1 900,000 PBO, December 31 960,000 ABO, December 31 890,000 Discount rate 10% Long-term expected return on plan assets 9% Required: 1. Using the above information calculate pension expense for 2012? 2. Will it be necessary for the company to report a minimum pension liability at Dec. 31, 2012? If so what is the amount.
The accountant for Serenity Ltd. has provided the following information for the company’s defined benefit pension plan for 2021: January 1, 2021 balances: Pension Liability $240,000 Other Comprehensive Income – Remeasurement losses $99,600 Defined benefit obligation $900,000 Plan assets $660,000 Additional information: Current service costs $120,000 Actual return on plan assets $21,000 Annual contribution to the plan $216,000 Benefits paid to retirees $14,400 Yield on high quality long-term corporate bonds 7% Defined benefit obligation, December 31, 2021 (per actuary) $1,025,000 Required: 1. Assuming Serenity is a publicly traded firm reporting under IFRS, complete the following: a. Calculate the pension expense, defined pension obligation, plan assets, and pension liability accounts at December 31, 2021, using a pension worksheet. b. Prepare the necessary journal entries related to the pension plan for 2021. c. Prepare a partial balance sheet illustrating how the pension plan would be…
The following information is related to the defined benefit pension plan of Stanley-Morgan Industries for the year 2021: Service cost $ 62,000 Contributions to pension plan 114,000 Benefits paid to retirees 151,000 Plan assets (fair value), January 1 649,000 Plan assets (fair value), December 31 766,000 Actual return on plan assets 154,000 PBO, January 1 945,000 PBO, December 31 950,500 Discount rate 10 % Long-term expected return on plan assets 9 % Assuming no other relevant data exist, what is Stanley-Morgan's pension expense for 2021?
The accountant for Marlin Corporation has developed the following information for the company's defined-benefit pension plan for 2018: Service cost $1,000,000 Actual return on plan assets 500,000 Annual contribution to the plan 1,840,000 Amortization of prior service cost 250,000 Benefits paid to retirees 120,000 Settlement rate 10% Expected rate of return on plan assets 8% The accumulated benefit obligation at December 31, 2018, amounted to $6,500,000.…
The following information is related to the defined benefit pension plan of Avalanche Corporation for the year: Service cost $ 62,000 Contributions to pension plan 118,000 Benefits paid to retirees 156,000 Plan assets (fair value), January 1 641,000 Plan assets (fair value), December 31 758,000 Actual return on plan assets 155,000 PBO, January 1 925,000 PBO, December 31 923,500 Discount rate 10 % Long-term expected return on plan assets 9 % Assuming no other relevant data exist, what is the pension expense for the year? Multiple Choice $62,000. $89,810. $96,810. $154,500.
At the beginning of the current year, the memorandum records of OPPA Co's defined benefit plan showed the following:Fair value plan assets 7,500,000Defined benefit obligation (11,000,000)Prepaid (accrued) pension expense (3,500,000) The entity determined that its current service cost was P1,000,000 and the interest cost is 10%. The expected return on plan assets was 12% but the actual return during the year was 8%. Other related information at the end of the year: Contribution to the plan P 1,200,000Benefits paid to retires 1,500,000Decrease in defined benefit obligation due to changes in actuarial assumptions 200,000 4. Compute for the fair value of plan assets at the end of the current year. 5. Compute for the defined benefit obligation at the end of the current year.
The trustee for the Bronson Corporation defined benefit pension plan sent a report to the CEO with the following information for the fiscal year: Beginning balance of plan assets at fair value $ 1,560,000 Actual return on plan assets $ 210,000 Employer’s contribution $ 150,000 Distributions to retirees $ 75,000 Service cost $ 125,000 Interest cost $ 156,000 Loss from changes in benefits or assumptions $ 35,000 Beginning balance of the PBO $ 1,580,000 The ending balance of plan assets is: Multiple Choice $1,770,000. $1,845,000. $1,920,000. $1,955,000.