Computing ABO, PBOMallard Company sponsors a pension plan with the following pension benefit:Benefit paid at each year-end during retirement = (Number of years worked x Annual salary at retirement)+25Employee Josie began work with the company and received credit for service as of January 1 of Year 1.Josie is expected to work a total of 30 years with an annual salary at retirement of $100,000. She isexpected to draw 10 years of retirement benefits. The discount rate is 10%.Note: Carry all decimals in calculations; round the final answer to the nearest dollar.a. Compute the PBO on December 31 of Year 10, if Josie's current salary is $30,000.b. Compute the ABO on December 31 of Year 10, if Josie's current salary is $30,000.

PBO- Projected Benefit Obligation:The projected benefit obligation is a measurement used to…

Answered: Mallard Company sponsors a pension plan…

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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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…
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…
A pension scheme provides retirement benefits to a group of 200 pensioners currently aged 65 exact. The scheme pays an annual income of £19,000 annually in arrears if the pensioner is alive. A lump sum of £50,000 is paid at the end of the year of death. During the first year 3 members died. (i) (ii) Basis: Calculate, showing all working, the mortality profit or loss for the year. Explain why the mortality profit or loss has arisen. Mortality: Interest: AM92 Ultimate 6% p.a. effective
A self-employed internet security specialist deposits $2,000 at the end of every month into a simplified employee pension (SEP) account that earns 4.8% interest compounded monthly. What is the value (in dollars) of the SEP in 25 years? (Round your answer to the nearest cent.)
None
Frazier Refrigeration amended its defined benefit pension plan on December 31, 2018, to increase retirement benefits earned with each service year. The consulting actuary estimated the prior service cost incurred by making theamendment retroactive to prior years to be $110,000. Frazier’s 100 present employees are expected to retire at therate of approximately 10 each year at the end of each of the next 10 years.Required:1. Using the service method, calculate the amount of prior service cost to be amortized to pension expense ineach of the next 10 years.2. Using the straight-line method, calculate the amount of prior service cost to be amortized to pension expensein each of the next 10 years.
A person joins a pension plan at age 40 (40th birthday). How much will s/he have to pay into the pension fund each year in order to accumulate a balance of $500,000 by the time s/he retires (age 65)? Assume that the final payment is on his/her 60th birthday. Interest rates are 9% compounded semi-annually.
The Carrasco Company has provided you the following information pertaining to its defined benefit pension plan that was adopted on January 1, 20X1: The service cost was $750,000 during 20X1 and $1,125,000 during 20X2. The contribution to the pension plan was $600,000 on December 31, 20X1 and $1,200,000 on December 31, 20X2. The actuarially determined discount rate and the expected return on plan assets are both 10%. The actual return on plan assets was 10.5%. Retirement benefits pertaining to years of service prior to 20X1 were not granted to the employees. What is the pension expense for the year ended December 31, 20X2? Multiple Choice $1,140,000 $1,065,000 $1,200,000 $1,137,000
Manji
Clark Industries has a defined benefit pension plan that specifies annual, year-end retirement benefits equal to: 1.5% × Service years Final year's salary Stanley Mills was hired by Clark at the beginning of 2005. Mills is expected to retire at the end of 2049 after 45 years of service. His retirement is expected to span 15 years. At the end of 2024, 20 years after being hired, his salary is $94,000. The company's actuary projects Mills's salary to be $410,000 at retirement. The actuary's discount rate is 6% For all requirements, round final answers to the nearest whole dollars. Do not round Intermediate calculations. Use tables, Excel, or a financial calculator. (FV of $1. PV of $1. EVA of $1. PVA of $1. FVAD of $1 and PVAD of $1) Required: 1. Estimate the amount of Stanley Mills's annual retirement payments for the 15 retirement years earned as of the end of 2024. 2. Suppose Clark's pension plan permits a lump-sum payment at retirement In lieu of annuity payments. Determine the…

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