INTERMIDIATE ACCOUNTING
10th Edition
ISBN: 9781260934427
Author: SPICELAND
Publisher: MCG
expand_more
expand_more
format_list_bulleted
Videos
Textbook Question
Chapter 17, Problem 17.14BE
Postretirement benefits; determine the APBO and service cost
• LO17–9, LO17–10
Prince Distribution Inc. has an unfunded postretirement benefit plan. Medical care and life insurance benefits are provided to employees who render 10 years service and attain age 55 while in service. At the end of 2018, Jim Lukawitz is 31. He was hired by Prince at age 25 (6 years ago) and is expected to retire at age 62. The expected postretirement benefit obligation for Lukawitz at the end of 2018 is $50,000 and $54,000 at the end of 2019. Calculate the accumulated postretirement benefit obligation at the end of 2018 and 2019 and the service cost for 2018 and 2019, as pertaining to Lukawitz.
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solution
Students have asked these similar questions
Problem 10-25 (LO. 2)
For calendar year 2020, Jean was a self-employed consultant with no employees. She had $80,000 of net profit from consulting and paid $7,000 in medical insurance premiums on her policy covering 2020. How much of these premiums may Jean deduct as a deduction for AGI? As an itemized deduction? If an amount is zero, enter "0".
Self-employed persons can deduct fill in the blank 1 % of their medical insurance premiums as a deduction for AGI in 2020. Thus, Jean may deduct $fill in the blank 2 as a deduction AGI and she may deduct $fill in the blank 4 as an itemized deduction (subject to the AGI floor).
Comprehensive Problem 12-51 (LO 12-1, LO 12-2, LO 12-3) (Algo)
Santini's new contract for 2023 indicates the following compensation and benefits:
Benefit Description
Salary
Health insurance
Restricted stock grant
Bonus
Hawaii trip
Group-term life insurance
Parking ($336 per month)
Amount
$ 131,500
10,500
2,500
5,300
4,300
Santini is 54 years old at the end of 2023. He is single and has no dependents. Assume that the employer matches $1 for $1 for the
first $6,000 that the employee contributes to his 401(k) during the year. The restricted stock grant is 500 shares granted when the
market price was $5 per share. Assume that the stock vests on December 31, 2023, and that the market price on that date is $15.00
per share. Also assume that Santini is willing to make any elections to reduce equity-based compensation taxes. The Hawaii trip was
given to him as the outstanding salesperson for 2022. The group-term life policy gives him $150,000 of coverage. Assume that Santini
does not itemize…
Problem 6-4A & 6-5A (Algo)
[The following information applies to the questions displayed below.
Greer Utsey earned $47,900 in 2022 for a company in Kentucky. Greer is single with one dependent under 17 and is paid
weekly. The FUTA rate in Kentucky for 2022 is 0.6 percent on the first $7,000 of employee wages, and the SUTA rate is
5.4 percent with a wage base of $11,100. Use the percentage method in Appendix C and the state information in
Appendix D. Manual payroll system is used and Box 2 is not checked.
Problem 6-5A (Algo)
Required:
Compute the employer's share of the taxes for the third weekly payroll of the year.
Note: Do not round intermediate calculation. Round your final answer to decimal places.
Federal income tax withholding
Social Security tax
Medicare tax
FUTA tax
SUTA tax
State income tax withholding
Chapter 17 Solutions
INTERMIDIATE ACCOUNTING
Ch. 17 - Prob. 17.1QCh. 17 - Prob. 17.2QCh. 17 - Prob. 17.3QCh. 17 - What is the vested benefit obligation?Ch. 17 - Prob. 17.5QCh. 17 - Prob. 17.6QCh. 17 - Name three events that might change the balance of...Ch. 17 - Prob. 17.8QCh. 17 - Prob. 17.9QCh. 17 - Prob. 17.10Q
Ch. 17 - The return on plan assets is the increase in plan...Ch. 17 - Define prior service cost. How is it reported in...Ch. 17 - Prob. 17.13QCh. 17 - Is a companys PBO reported in the balance sheet?...Ch. 17 - What two components of pension expense may be...Ch. 17 - Prob. 17.16QCh. 17 - Evaluate this statement: The excess of the actual...Ch. 17 - Prob. 17.18QCh. 17 - TFC Inc. revises its estimate of future salary...Ch. 17 - Prob. 17.20QCh. 17 - Prob. 17.21QCh. 17 - Prob. 17.22QCh. 17 - The components of postretirement benefit expense...Ch. 17 - The EPBO for Branch Industries at the end of 2018...Ch. 17 - Prob. 17.25QCh. 17 - Prob. 17.26QCh. 17 - Prob. 17.1BECh. 17 - Prob. 17.2BECh. 17 - Prob. 17.3BECh. 17 - Prob. 17.4BECh. 17 - Prob. 17.5BECh. 17 - Prob. 17.6BECh. 17 - Prob. 17.7BECh. 17 - Prob. 17.8BECh. 17 - Prob. 17.9BECh. 17 - Prob. 17.10BECh. 17 - Net gain LO176 The projected benefit obligation...Ch. 17 - Prob. 17.12BECh. 17 - Prob. 17.13BECh. 17 - Postretirement benefits; determine the APBO and...Ch. 17 - Prob. 17.1ECh. 17 - Prob. 17.3ECh. 17 - Prob. 17.4ECh. 17 - Prob. 17.5ECh. 17 - Prob. 17.6ECh. 17 - Prob. 17.7ECh. 17 - Prob. 17.8ECh. 17 - Prob. 17.9ECh. 17 - Prob. 17.14ECh. 17 - Prob. 17.17ECh. 17 - Prob. 17.23ECh. 17 - Prob. 17.32ECh. 17 - Prob. 17.33ECh. 17 - Prob. 17.1DMPCh. 17 - Prob. 17.2DMPCh. 17 - Prob. 17.3DMPCh. 17 - Prob. 17.5DMPCh. 17 - Prob. 17.6DMPCh. 17 - Prob. 17.8DMPCh. 17 - Prob. 17.9DMPCh. 17 - Prob. 17.11DMPCh. 17 - Prob. 1CCTCCh. 17 - Prob. 2CCTC
Knowledge Booster
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
- QUESTION 3 Bacon Bad is a national diner that has set up a defined benefit pension plan for its employees. The company uses IFRS and has provided you with the following information pertaining to its pension plan: Pension obligation, December 31,2021 - $6854203 Plan assets, December 31, 2021 - $5906519 Interest rate on pension obligations - 3% Current service cost for the year (accrued at the end of the year) - $598059 Improvement in pension plan, effective on January 1, 2022 - $62000 Actuarial gain on change in assumptions - $0 Expected retum on plan assets -3% of plan assets Actual return on plan assets - $271186 Amounts remitted by employer to pension trust on January 1,2022 - $668416 Payments we do not need payment to retireearrow_forwardQuestion 17 Swifty Company sponsors a defined benefit pension plan for its employees. The following data relate to the operation of the plan for the year 2020 in which no benefits were paid. 1. The actuarial present value of future benefits earned by employees for services rendered in 2020 amounted to $55,500. 2. The company’s funding policy requires a contribution to the pension trustee amounting to $144,729 for 2020. 3. As of January 1, 2020, the company had a projected benefit obligation of $908,100, an accumulated benefit obligation of $802,100, and a debit balance of $400,100 in accumulated OCI (PSC). The fair value of pension plan assets amounted to $601,200 at the beginning of the year. The actual and expected return on plan assets was $54,100. The settlement rate was 9%. No gains or losses occurred in 2020 and no benefits were paid. 4. Amortization of prior service cost was $50,500 in 2020. Amortization of net gain or loss was not required in 2020. (c)…arrow_forwardRequired information Problem 6-4A & 6-5A (Algo) [The following information applies to the questions displayed below] Joseph Farmer earned $124,800 in 2020 for a company in Kentucky. He is single with one dependent under 17 and is paid monthly. The FUTA rate in Kentucky for 2020 is 0.6 percent on the first $7,000 of employee wages, and the SUTA rate is 5.4 percent with a wage base of $10,800. Use the percentage method (or the IRS federal income tax withholding assistant) in Appendix C and the state information in Appendix D. Manual payroll system is used and Box 2 is not checked. Problem 6-4A (Algo) Required: Compute the following employee share of the taxes. (Do not round intermediate calculation. Round your final answer to 2 decimal places) Federal income tax withholding Social Security tax Medicare tax State income tax withholding Check maarrow_forward
- Exercise 17-25 (Algo) Postretirement benefits; determine APBO, service cost, interest cost; prepare journal entry [LO17-10, 17-11] The following data are available pertaining to Household Appliance Company's retiree health care plan for 2024: Number of employees covered Years employed as of January 1, 2024 Attribution period 2 2 [each] 25 years Expected postretirement benefit obligation, January 1 Expected postretirement benefit obligation, December 31 Interest rate Funding Required: 1. What is the accumulated postretirement benefit obligation at the beginning of 2024? $ 56,000 $ 58,800 5% nonearrow_forwardExercise 11-10 (Algorithmic) (LO. 5) Myers, who is single, reports compensation income of $71,600 in 2022. He is an active participant in his employer's qualified retirement plan. Myers contributes $6,000 to a traditional IRA. Click here to access Exhibit 11.2 Phaseout of IRA Deduction of an Active Participant Do not round any division. If required, round your answer to the nearest dollar. of the $6,000 contribution, how much can Myers deduct?arrow_forwardLorin Management Services has an unfunded postretirement benefit plan. On December 31, 2024, the following data were available concerning changes in the plan's accumulated postretirement benefit obligation with respect to one of Lorin's employees: APBO at the beginning of 2024 $ 16,364 Interest cost: ($16,364 × 10%) 1,636 Service cost: ($44,000 × 1 ÷ 22) 2,000 Portion of EPBO attributed to 2024 APBO at the end of 2024 $ 20,000 Required: Over how many years is the expected postretirement benefit obligation being expensed (attribution period)? What is the expected postretirement benefit obligation at the end of 2024? When was the employee hired by Lorin? What is the expected postretirement benefit obligation at the beginning of 2024?arrow_forward
- ltakeAssignmentSessionLocator=&inprogress3false еВook Problem 10-25 (LO. 2) For calendar year 2020, Jean was a self-employed consultant with no employees. She had $80,000 of net profit from consulting and paid $7,000 in medical insurance premiums on her policy covering 2020. How much of these premiums may Jean deduct as a deduction for AGI? As an itemized deduction? If an amount is zero, enter "0". Self-employed persons can deduct % of their medical insurance premiums as a deduction for AGI in 2020. Thus, Jean may deduct s as a deduction AGI and she may deduct as an itemízed deduction (subject to the AGI floor). Previous Check My Work 10:11 PM 32 F Mostly clear 1/23/2022arrow_forwardssignment/takeAssignmentMain.do?invoker=&takeAssignmentSessionLocator=&inprogress3false 142 Upd The Data Company employs John and Jesse. John has worked for Data for 4 years, whereas Jesse has worked for the company for only 18 months. Both are 27 years old. I. John must be eligible to participate in Data's qualified pension plan. II. Jesse must be eligible to participate in Data's qualified pension plan. Oa. Only statement II is correct. Ob. Only statement I is correct. Oc. Both statements are correct. Od. Neither statement is correct. Previous Nextarrow_forwardQuestion 16## Buffalo Corp. sponsors a defined benefit pension plan for its employees. On January 1, 2020, the following balances relate to this plan. Plan assets $463,200 Projected benefit obligation 578,200 Pension asset/liability 115,000 Accumulated OCI (PSC) 100,100 Dr. As a result of the operation of the plan during 2020, the following additional data are provided by the actuary. Service cost $86,600 Settlement rate, 8% Actual return on plan assets 53,200 Amortization of prior service cost 18,000 Expected return on plan assets 50,200 Unexpected loss from change in projected benefit obligation, due to change in actuarial predictions 79,600 Contributions 99,600 Benefits paid retirees 85,100 Also please help me answer part B. (b) Prepare the journal entry for pension expense for 2020. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is…arrow_forward
- 16. Southeast Technology provides postretirement health care benefits to employees. On January 1, 2021, the following plan-related data were available: ($ in thousands) Prior service cost—originated in 2016 $ 50 Accumulated postretirement benefit obligation 530 Fair value of plan assets none Average remaining service period to retirement 20 years (same in previous 10 years) Average remaining service period to full eligibility 15 years (same in previous 10 years) On January 1, 2021, Southeast amends the plan in response to spiraling health care costs. The amendment establishes an annual maximum of $3,000 for medical benefits that the plan will provide. The actuary determines that the effect of this amendment is to decrease the APBO by $80,000. Management amortizes prior service cost on a straight-line basis. The interest rate is 8%. The service cost for 2021 is $114,000. Required:1. Complete the below table to calculate the prior service cost…arrow_forwardQuestion 16# Buffalo Corp. sponsors a defined benefit pension plan for its employees. On January 1, 2020, the following balances relate to this plan. Plan assets $463,200 Projected benefit obligation 578,200 Pension asset/liability 115,000 Accumulated OCI (PSC) 100,100 Dr. As a result of the operation of the plan during 2020, the following additional data are provided by the actuary. Service cost $86,600 Settlement rate, 8% Actual return on plan assets 53,200 Amortization of prior service cost 18,000 Expected return on plan assets 50,200 Unexpected loss from change in projected benefit obligation, due to change in actuarial predictions 79,600 Contributions 99,600 Benefits paid retirees 85,100 (b) Prepare the journal entry for pension expense for 2020. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the…arrow_forwardw the summary page so Upon his retirement earlier this year, Salvatore received a $42,000 retiring allowance from the company for whom he had worked since 1980. He joined his company's registered pension plan two years after he was hired. If Salvatore accumulated $9,640 in RRSP contribution room for this year and he has an RRSP carryforward of $16.500 from previous years, what portion of his retiring allowance represents the NAXINUM amount he can rollover into his RRSP? Oa) $ 9,640 Ob) $ 26,140 can easy go Oc) $ 35,000arrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
Accounting for Derivatives Comprehensive Guide; Author: WallStreetMojo;https://www.youtube.com/watch?v=9D-0LoM4dy4;License: Standard YouTube License, CC-BY
Option Trading Basics-Simplest Explanation; Author: Sky View Trading;https://www.youtube.com/watch?v=joJ8mbwuYW8;License: Standard YouTube License, CC-BY