contribution of P2,000,000 to a fund held and managed by a5. An entity's retirement benefit plan provides for an annualontribution of P2,000,000 to a fund held and managed by athird party. The fund is legally separate from the entity and isto be used solely for the retirement pay of employees. Theamount to be received by a retiring employee is dependent onthe amount of contributions and the investment incomeearned on those contributions. The third party trustee assumesthe obligation of disbursing the funds to retiring employees.The entity made the following contributions to the fund: 20x1,PO; 20x2, P4,700,000; and 20x3, P1,200,000Requirements: Provide the entries to record the contributions.

In the given case, the fund is legally separate from the entity and the third party trustee assumes…

contribution of P2,000,000 to a fund held and managed by a An entity's retirement benefit plan provides for an annual third party. The fund is legally separate from the entity and is to be used solely for the retirement pay of employees. The amount to be received by a retiring employee is dependent on

contribution of P2,000,000 to a fund held and managed by a An entity's retirement benefit plan provides for an annual third party. The fund is legally separate from the entity and is to be used solely for the retirement pay of employees. The amount to be received by a retiring employee is dependent on

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Similar questions

In a defined-benefit plan, a formula is used that Select one: a. requires that the benefit of gain or the risk of loss from the assets contributed to the pension plan be borne by the employee. b. requires that pension expense and the cash funding amount be the same. c. defines the contribution the employer is to make; no promise is made concerning the ultimate benefits to be paid out to the employees. d. defines the benefits that the employee will receive at the time of retirement.
Which one of the following is a correct statement about the nontax characteristics of a pooled income fund? A)It must pay a fixed dollar amount to the charitable beneficiary annually. B)The principal is distributed to the charitable beneficiary at the end of the noncharitable beneficiary's (or beneficiaries') life (or lives). C)Only the grantor and the charity can be beneficiaries. D)The income beneficiary cannot receive more than 10% of the original principal value per year.
Li Co. is a publicly traded entity that sponsors both a pension plan and a postretirement plan providing other, nonpension benefits. The following information relates to the current year's activity of Li's defined benefit postretirement plan: $240,000 60,000 Interest cost on accumulated benefit obligation 80,000 Service cost Return on plan assets Amortization of actuarial loss 20,000 10,000 Amortization of prior service cost How much is Li's nonpension postretirement benefit cost?
Oriole Company received the following selected information from its pension plan trustee concerning the operation of the company's defined benefit pension plan for the year ended December 31, 2025. SEE ATTACHED IMAGE The service cost component of pension expense for employee services rendered in the current year amounted to $77,000 and the amortization of prior service cost was $122,100. The company's actual funding (contributions) of the plan in 2025 amounted to $252,000. The expected return on plan assets and the actual rate were both 10%; the interest/discount (settlement) rate was 10%. Accumulated other comprehensive income (PSC) had a balance of $1,221,000 on January 1, 2025. Assume no benefits paid in 2025. Prepare the journal entry to record pension expense and the employer's contribution to the pension plan in 2025. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles…
S1: Under a defined contribution plan, the amount of a participant’s future benefits is determined by the contributions paid by the employer, the participant, or both, and the operating efficiency and investment earnings of the fund. S2: Under a defined benefit plan, the payment of promised retirement benefits depends on the financial position of the plan and the ability of contributors to make future contributions to the plan as well as the investment performance and operating efficiency of the plan. Only S1 is true None is true Only S2 is true Both are true
Dog
A company sells Gizmos to consumers at a price of $117 per unit. The cost to produce Gizmos is $27 per unit. The company will sell 15,000 Gizmos to consumers each year. The fixed costs incurred each year will be $190,000. There is an initial investment to produce the goods $3,400,000 which will be depreciated straight line over the 10-year life of the investment to a salvage value of $0. The opportunity cost of capital is 6% and the tax rate is 34%. What is the operating cash flow each year?
22
A government makes a contribution to its pension plan in the amount of $10,000 for year 1. The actuarially-determined annual required contribution for year 1 was $12,500. The pension plan paid benefits of $8,200 and refunded employee contributions of $800 for year 1. What is the pension expense for the Government-Wide Statements for year 1? $8,200 $10,000 $12,500 None of above
What was the dollar amount of loss (gain) on plan assets that was recognized in OCI during 20X1? Prepare the journal entries to record pension expense, the contribution, and the OCI effects.
Which of the following is true about plan assets? Any excess return on plan assets are earned to the benefit of the company Includes qualifying insurance policies None of the statements are correct These are assets held for short-term purpose in the event of employee retirement during the year
Puhlman Inc. provides a defined benefit pension plan to its employees. It smooths recognition of its gains and losses when computing its market-related value to compute expected return. Additional information follows: December 31, Description 20X1 20X0 ? $2,500,000 2,150,000 2,100,000 PBO АВО $2,335,000 Fair value of plan assets Market-related value of plan assets (smoothed recognition) Benefit payments made AOCI-net actuarial (gain) loss AOCI-prior service cost Balance sheet pension asset (liability) 2,342,800 272,000 114,000 2,100,000 231,000 -0- 400,000 (400,000) 214,000 321,000 129,000 Service cost Contribution Actual return Discount rate for PBO 9% 10% Expected rate of return Average remaining service life of employees 10% 10% 15 years 15 years During 20X1, the PBO increased by $33,000 due to a decrease in the discount rate from the previous year. The 20X0 discount rate assumption was used to compute 20X1 service cost and interest cost. Required: 1. Compute the fair value of plan…