Consolidated Industries is planning to operate for 10 more years and then cease operations. At that time (in 10 years), it expects to have the followingpension benefit obligations:Year11-1516-20Annual Total Payment$3,100,0002,600,0002,100,00021-2526-3031-351,600,0001,100,000The current value of the firm's pension fund is $6.5 million. Assume that all cash flows occur at year-end.a. Consolidated's expected return on pension assets is 6%, and it uses 6% to discount the expected pension benefit payments. What is thepresent value of the firm's pension fund benefits? Do not round intermediate calculations. Round your answer to the nearest dollar.$b. Is the plan underfunded or overfunded? Do not round intermediate calculations. Round your answer to two decimal places.Funding ratio =which means the assets are -Select- than the PV of benefits and the plan is -Select-

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Answered: Consolidated Industries is planning to…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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The Valencia Development Company (VDC) is planning to sell a P100,000,000, 10-year, 12%, semiannual payment bond issue. Provisions for a sinking fund to retire the issue over its life will be included in the indenture. Sinking fund payments will be made at the end of each year, and each payment must be enough to retire 10% of the original amount of the issue. The last sinking fund payment will retire the last of the bonds. The bonds to be retired each period can be purchased on the open market or obtained by calling up to 5% of the original issue at par, at VDC’s option. How large must each sinking fund payment be if the company uses the option to call bonds at par? How large must each sinking fund payment be if the company decides to buy bonds on the open market? (You can only answer in words.)
1. Company has an plan to provide a pension plan for its one employee. They plan to start saving on 12/31/2020 and will save the same amount at the end of each year for 4 years ending at 12/31/2023. Once the money is accumulated on 12/31/2023. They will place in in an investment that will earn 9% annual interest. The company will pay $6,000 at the start of year year starting 1/1/2025 and continuing 4 more years to 1/1/2029 total of 5 payments. How much money will the company need to have collected at 1/1/2024 in order to start payming the annuity of $6,000 a year earning 9% annual interest rounded to the nearest full dollar? my answer was $30,000 or $66,6667. What am I doing wrong or how do I calculate this question? 2. If the amount of money the company sets aside is $25,000 at 12/31/2023 then if the amount the company needs to set aside every year is $5,887 starting 12/31/2020 then what interest does this account earn annually? my answer was 6% but I don't think that is correct how…
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Zaman Zoom Ltd have 500 employees with an average salary of $3,000 per month. Their average age are 30. The company is planning to start an Endowment scheme as the company pension scheme for all the company’s employees. The period of investment is expected to be for 30 years before the first batch of employees will go for retirment. The company is going to set aside a salary deduction system to deduct 50% of the required installment for the endowment scheme. The installment payment will be invested in the endowment scheme with a target to achieve a capital endowment sufficient to generate income to take care of the pension payment at 50% of the last drawn salaries expected to averaged at RM10,000 in 40 years time. A fund management with a good reputation had assured that the endowment fund will generate an average return at 6% per annum. a. Estimate the monthly installment required by the company to the endowment fund.b. How much will each employee will have to…
ABC LTD has a defined benefit pension plan. As at 31 December 2018, its plan had a book value of $140 million and a fair value of $160 million. The PBO at the time was $150 million. During the year, the company contributed an amount of $20 million to the fund, the fund paid out $ 15 million while the return on plan assets was $10 million. Service costs were $30 million, interest costs amounted to $12 million while actuarial gains were $3 million.Required; I). Fair value of plan assets as at 31 December 2019 II). The projected plan obligations as at 31 December 2019
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