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Exam 17: Pensions and Other Postretirement Benefits

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Question 71

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Which of the following is not included among the assumptions needed to estimate postretirement health care benefits?

A) Employee turnover.
B) Expected retirement age of plan participants.
C) Life expectancy of plan participants.
D) Return on plan assets.

E) None of the above
F) C) and D)

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Question 72

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The following is an incomplete pension spreadsheet for the current year for Swiss Mist Corporation. Required: 1) Complete the pension spreadsheet. 2) Prepare the journal entry to record pension expense for the year.

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Question 73

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Vrable Corporation has a defined benefit pension plan. Two alternative possibilities for pension-related data for the current calendar year are shown below: Required: For each independent case, calculate amortization of the net loss or gain that should be included as a component of pension expense for the current year.

The pension expense includes periodic changes that occur:

The amortization of a net gain has what effect on pension expense?

Data pertaining to the postretirement health care benefit plan of Danielson Delivery Service include the following for the current calendar year: Required: 1) Determine Danielson's postretirement benefit expense for the current year. 2) Prepare the journal entries to record the benefit expense and funding for the current year.

What are the possible components of pension expense? Which of these elements would exist in every defined benefit plan?

Which of the following is not a potential component of pension expense?

Which of the following is not a characteristic of a qualified pension plan?

The following data are available pertaining to Firewall Corporation's retiree health plan for 2013: Required: 1) What is the APBO at the beginning of 2013? 2) What is the interest cost for 2013? 3) What is service cost for 2013? 4) Prepare the journal entry to record the postretirement benefit expense for 2013.

There almost always is a balance sheet liability for postretirement benefit plans since very few are funded.

Why did the loss result in a reduction in accumulated other comprehensive income?

Suppan Service began the year with a net pension liability of $56 million (underfunded pension plan). Pension expense for the year included the following ($ in millions): service cost, $20; interest cost, $12; expected return on assets, $8; amortization of net gain, $4. Required: Prepare the appropriate general journal entry to record Suppan's pension expense.

What was the actuary's interest (discount) rate?

DeAngelo Yards, Inc., calculated pension expense for its underfunded pension plan as follows: Required: Which elements of DeAngelo's balance sheet are affected by the components of pension expense? What are the specific changes in these accounts?

Revenue and expense items and components of other comprehensive income can be reported in the statement of shareholders' equity using:

Pension data for Matta Corporation include the following for the current calendar year: Required: Assuming no change in actuarial assumptions and estimates, determine the service cost component of pension expense for the current year.

Revenue and expense items and components of other comprehensive income can be reported in a single statement of comprehensive income using:

What was FRC's pension expense for the year?

Persoff Industries International has a defined benefit pension plan. The company revised its estimate of future salary levels causing its defined benefit obligation to increase by $16 million. Also, Persoff's $25 million actual return on plan assets exceeded the 5% high-grade corporate bond rate times the $440 million plan assets. Persoff prepares its financial statements in accordance with International Financial Reporting Standards. The company will: