INTERMEDIATE ACCOUNTING
10th Edition
ISBN: 9781264397921
Author: SPICELAND
Publisher: MCG
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Question
Chapter 17, Problem 17.9E
To determine
Pension expense: Pension expense is an expense to the employer paid as compensation after the completion of services performed by the employees.
Pension expense includes the following components:
- Service cost
- Interest cost
- Expected return on plan assets
- Amortization of prior service cost
- Amortization of net loss or net gain
International Financial Reporting Standards (IFRS): IFRS are a set of international accounting standards which are framed, approved, and published by International Accounting Standards Board (IASB) for the preparation and disclosure of international financial reports.
To compute: Net pension cost of S Properties for the year 2018, if the financial statements are prepared as per IFRS
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*CMOU CD A1D 17 nz inn 1IDid =ın in
PBO balance, January 1
Plan assets balance, January 1
Service Cost
Interest cost
Gain from change in actuarial assumption
Benefits paid
Actual return on plan assets
Contributions 2021
$480
300
75
45
22
(36)
20
60
The expected long-term rate of return on plan assets was 8%. There were no AOCI balances related to pensions on January 1, 2021,
but at the end of 2021, the company amended the pension formula, creating a prior service cost of $12 million.
Required:
1. Calculate the pension expense for 2021.
2. Prepare the journal entries to record (a) pension expense, (b) gains or losses, (c) prior service cost, (d) funding,
and (e) payment of benefits for 2021.
3. What amount will Electronic Distribution report in its 2021 balance sheet as a net pension asset or net pension liability?
Complete this question by entering your answers in the tabs below.
Required 1
Required 2
Required 3
Calculate the pension expense for 2021. (Enter your answer in…
Exercise 17-2 (Algo) Determine the projected benefit obligation [LO17-3]
On January 1, 2024, Ravetch Corporation's projected benefit obligation was $46 million. During 2024, pension benefits paid by the
trustee were $6 million. Service cost for 2024 is $10 million. Pension plan assets (at fair value) increased during 2024 by $8 million as
expected. At the end of 2024, there were no pension-related other comprehensive income (OCI) accounts. The actuary's discount rate
was 10%.
Required:
Determine the amount of the projected benefit obligation at December 31, 2024.
Note: Enter your answers in millions rounded to 2 decimal places (i.e., 5,500,000 should be entered as 5.50). Amounts to be
deducted should be indicated with a minus sign.
Projected Benefit Obligation
Beginning of 2024
Service cost
Interest cost
End of 2024
$
0.00
Exercise 17-5 (Algo) Determine pension plan assets [LO17-4]
The following data relate to Ramesh Company's defined benefit pension plan:
($ in millions)
$790
79
Plan assets at fair value, January 1
Expected return on plan assets
Actual return on plan assets
Contributions to the pension fund (end of year)
Amortization of net loss
Pension benefits paid (end of year)
Pension expense
63
138
16
24
110
Required:
Determine the amount of pension plan assets at fair value on December 31. (Enter your answers in millions. Amounts to be c
should be indicated with a minus sign.)
Answer is complete but not entirely correct.
Pension Plan Assets
790
Beginning of the year
Next
Chapter 17 Solutions
INTERMEDIATE 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
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