Flint, Inc. is a furniture manufacturing company with 50 employees. Recently, after a long negotiation with the local labor union, the company decided to initiate a pension plan as a part of its compensation plan. The plan will start on January 1, 2025. Each employee covered by the plan is entitled to a pension payment each year after retirement. As required by accounting standards, the controller of the company needs to report the pension obligation (liability). On the basis of a discussion with the supervisor of the Personnel Department and an actuary from an insurance company, the controller develops the following information related to the pension plan. Average length of time to retirement Expected life duration after retirement Total pension payment expected each year after retirement for all employees. Payment made at the end of the year. The interest rate to be used is 9%. Click here to view factor tables. The present value of pension obligation (liability) On the basis of the information above, determine the present value of the pension obligation (liability). (Round factor values to 5 decimal places, e.g. 1.25124 and final answer to O decimal places, e.g. 458,581.) eTextbook and Media 15 years 10 years $ $812,100 per year SUPPORT
Flint, Inc. is a furniture manufacturing company with 50 employees. Recently, after a long negotiation with the local labor union, the company decided to initiate a pension plan as a part of its compensation plan. The plan will start on January 1, 2025. Each employee covered by the plan is entitled to a pension payment each year after retirement. As required by accounting standards, the controller of the company needs to report the pension obligation (liability). On the basis of a discussion with the supervisor of the Personnel Department and an actuary from an insurance company, the controller develops the following information related to the pension plan. Average length of time to retirement Expected life duration after retirement Total pension payment expected each year after retirement for all employees. Payment made at the end of the year. The interest rate to be used is 9%. Click here to view factor tables. The present value of pension obligation (liability) On the basis of the information above, determine the present value of the pension obligation (liability). (Round factor values to 5 decimal places, e.g. 1.25124 and final answer to O decimal places, e.g. 458,581.) eTextbook and Media 15 years 10 years $ $812,100 per year SUPPORT
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:Flint, Inc. is a furniture manufacturing company with 50 employees. Recently, after a long negotiation with the local labor
union, the company decided to initiate a pension plan as a part of its compensation plan. The plan will start on January 1,
2025. Each employee covered by the plan is entitled to a pension payment each year after retirement. As required by
accounting standards, the controller of the company needs to report the pension obligation (liability). On the basis of a
discussion with the supervisor of the Personnel Department and an actuary from an insurance company, the controller
develops the following information related to the pension plan.
Average length of time to retirement
Expected life duration after retirement
Total pension payment expected each year after retirement
for all employees. Payment made at the end of the year.
The interest rate to be used is 9%.
Click here to view factor tables.
The present value of pension obligation (liability)
On the basis of the information above, determine the present value of the pension obligation (liability). (Round factor values
to 5 decimal places, e.g. 1.25124 and final answer to O decimal places, e.g. 458,581.)
B
eTextbook and Media
15 years
10 years
$
$812,100 per year
SUPPORT
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