Hicks Cable Company has a defined benefit pension plan. Three alternative possibilities for pension-related dataat January 1, 2016, are shown below:($ in 000s)Case 1Case 2Case 3$ (330)(8)16(2,550)(2,670)2,700Net loss (gain)-AOCI, Jan. 12016 loss (gain) on plan assets2016 loss (gain) on PBOAccumulated benefit obligation, Jan. 1Projected benefit obligation, Jan. 1Fair value of plan assets, Jan. 1Average remaining service periodof active employees (years)$ 320$ 260(11)(23)(2,950)(265)(1,450)(1,700)1,550(3,310)2,800121510Required:1. For each independent case, calculate any amortization of the net loss or gain that should be included as acomponent of pension expense for 2016.2. For each independent case, determine the net loss-AOCI or net gain-AOCI as of January 1, 2017.

Case 1: Net loss (gain) = $320 Corridor = $331 So, no excess no amortisation Case 2: Net loss (gain)…

Answered: Hicks Cable Company has a defined…

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 following information relates to the defined benefit pension plan of Nelson, Inc. Projected benefit obligation Fair value of plan assets Accumulated OCI-net actuarial gain Settlement rate (for year) Expected rate of return (for year) The interest cost for 2020 is $158,640 $211,520 12/31/19 2,644,000 3,118,000 432,000 O $240,120 O $280,140 O None of the above 6% 8% 12/31/20 4,002,000 3,328,000 480,000 For 2020, Nelson estimates that the average remaining service life of its current employees is 8 years. Nelson's contribution to the plan was $364,000 in 2020 and benefits paid to retirees were $276,000, 6% 7%
Herring Wholesale Company has a defined benefit pension plan. On January 1, 2024, the following pension related data were available: Net gain-AOCI Accumulated benefit obligation Projected benefit obligation Fair value of plan assets Average remaining service period of active employees (expected to remain constant for the next several years) 1. Amount amortized to 2024 pension expense 2. Pension expense 3. Net gain ($ in thousands) $ 349 3,070 3,100 2,600 The rate of return on plan assets during 2024 was 9%, although it was expected to be 10%. The actuary revised assumptions regarding the PBO at the end of the year, resulting in a $42,000 decrease in the estimate of that obligation. Required: 1. Calculate any amortization of the net gain that should be included as a component of net pension expense for 2024. 2. Assume the net pension expense for 2024, not including the amortization of the net gain component, is $344,000. What is pension expense for the year? 3. Determine the net…
Presented below is pension information for A Company for the year 2016: Interest on plan assets P24,000 Interest on vested benefits 10,000 Service cost 35,000 Interest on defined benefit obligation 21,000 Past service cost due to increase in benefits 18,000 The amount of pension expense to be reported for 2016 is
Hicks Cable Company has a defined benefit pension plan. Three alternative possibilities for pension-related data at January 1, 2021, are shown below: ($ in thousands) Case 1 Case 2 Case 3 Net loss (gain)—AOCI, Jan. 1 $ 337 $ (407 ) $ 297 2021 loss (gain) on plan assets (28 ) (25 ) 5 2021 loss (gain) on PBO (40 ) 33 (301 ) Accumulated benefit obligation, Jan. 1 (3,120 ) (2,720 ) (1,620 ) Projected benefit obligation, Jan. 1 (3,480 ) (2,840 ) (1,870 ) Fair value of plan assets, Jan. 1 2,970 2,870 1,720 Average remaining service periodof active employees (years) 12 15 10 Required:1. For each independent case, calculate any amortization of the net loss or gain that should be included as a component of pension expense for 2021.2. For each independent case, determine the net loss—AOCI or net gain—AOCI as of January 1, 2022.
4) Electronic Distribution has a defined benefit pension plan. Characteristics of the plan during 2021 are as follows: ($ millions) PBO balance, January 1 $ 480 Plan assets balance, January 1 350 Service cost 75 Interest cost 45 Gain from change in actuarial assumption 26 Benefits paid (36 ) Actual return on plan assets 23 Contributions 2021 65 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 $13 million. (Enter your answers in millions (i.e., 10,000,000 should be entered as 10).) 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…
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