Oregon Company's employees are eligible for retirement with benefits at the end of the year in which both age 60 is attained and they have completed 35 yearsof service. The benefits provide 15 years' reimbursement for health care services of $39,000 annually, beginning one year from the date of retirement. RalphYoung was hired at the beginning of 1988 by Oregon after turning age 22 and is expected to retire at the end of 2026 (age 60). The discount rate is 4 %. Theplan is unfunded. The PV of an ordinary annuity of $1 where n = 15 and i = 4% is 11.11839. The PV of $1 where n = 2 and i = 4% is 0.92456. With respectto Ralph, what is the service cost to be included in Oregon's 2024 postretirement benefit expense, rounded to the nearest dollar? Multiple Choice $6,881 $12, 382 $39,000 $10, 280

Companies provide the retirement options to the employees and companies make provisions for that in…

Answered: Oregon Company's employees are eligible…

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

Sachs Brands's defined benefit pension plan specifies annual retirement benefits equal to 1.2% x service years x final year's salary, payable at the end of each year. Angela Davenport was hired by Sachs at the beginning of 2010 and is expected to retire at the end of 2044 after 35 years' service. Her retirement is expected to span 18 years. Davenport's salary is $95,000 at the end of 2024 and the company's actuary projects her salary to be $305,000 at retirement. The actuary's discount rate is 9%. Note: Use tables, Excel, or a financial calculator. (EV of $1. PV of $1. FVA of $1. PVA of $1. EVAD of $1 and PVAD of $1) At the beginning of 2025, the pension formula was amended to: 1.40% * Service years * Final year's salary The amendment was made retroactive to apply the increased benefits to prior service years. Required: 1. What is the company's prior service cost at the beginning of 2025 with respect to Davenport after the amendment described above? 2. Since the amendment occurred at…
Sandra owns a small manufacturing company, Tamarisk Camping Stuff Co. The company has been working to perfect a lightweight plastic material to be used for a variety of camping products. Sandra plans to enter the marketplace with a durable, lightweight folding table. Similar tables regularly sell for $39-$44 for a 6-foot table, so Sandra realizes that she'll have to stay within that range. She believes her table could sell on the higher end of this range, however, so she is using a target selling price of $44 for planning purposes. Sandra needs to generate an ROI of at least 20% on her invested assets to make this worthwhile in the long term. Her invested assets are $800,000, and she expects to sell 5,000 tables in her first year of activity. (a) Calculate the target cost for one table. Target cost for one table $ (b1) eTextbook and Media Text 12 Attempts: 1 of 1 used If the SG&A portion of that unit cost is estimated to be $7, how much does that leave for the product cost per unit?…
How do I solve the following: An employee that has 35 years until retirement has a current salary of $30,000 per year. The employee's wages are expected to increase by 5% annually over the next 35 years. The employer has a defined benefit pension plan in which a worker’s annual pension benefit is equal to 2% of the employee's final year’s wage for each year of employment, multiplied by the number of years of employment. The employee's expected annual pension benefit is calculated as $115,836.32. The cmpany contributes to the pension plan each year for the next 35 years. Assume 10% actuarial rate of return, and 30 years of retirement life. At the employee's time of retirement, what does the accumulated amount in the employee's pension plan have to be in order to meet the employee's annual pension benefit each year in 30 years?
Sachs Brands's defined benefit pension plan specifies annual retirement benefits equal to 1.6% × service years x final year's salary, payable at the end of each year. Angela Davenport was hired by Sachs at the beginning of 2007 and is expected to retire at the end of 2041 after 35 years' service. Her retirement is expected to span 18 years. Davenport's salary is $90,000 at the end of 2021 and the company's actuary projects her salary to be $240,000 at retirement. The actuary's discount rate is 7%. (FV of $1, PV of $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD of $1) (Use appropriate factor(s) from the tables provided.) Required: 1. What is the company's projected benefit obligation at the beginning of 2021 (after 14 years' service) with respect to Davenport? (Do not round intermediate calculations. Round your final answer to the nearest whole dollar.) 2. Estimate by the projected benefits approach the portion of Davenport's annual retirement payments attributable to 2021 service. 3.…
Check my work Problem 19-18 (Static) EPS; stock options; nonconvertible preferred; convertible bonds; shares sold (LO19-4, 19-5, 19-6, 19-7, 19-8, 19-9] At January 1, 2021, Canaday Corporation had outstanding the following securitles: 600 million common shares 20 million 6% cumulative preferred shares, $50 par 6.4% convertible bonds, $2,000 million face amount, convertible into 80 million common shares The following additional information is available: On September 1, 2021, Canaday sold 72 million additional shares of common stock. • Incentive stock options to purchase 60 million shares of common stock after July 1, 2020, at $12 per share, were outstanding at the beginning and end of 2021. The average market price of Canaday's common stock was $18 per share during 2021. Canaday's net income for the year ended December 31, 2021, was $1,476 million. The effective income tax rate was 25%. Required: 1. & 2. Calculate basic and the diluted earnings per common share for the year ended…
Sachs Brands's defined benefit pension plan specifies annual retirement benefits equal to 1.3% × service years x final year's salary, payable at the end of each year. Angela Davenport was hired by Sachs at the beginning of 2007 and is expected to retire at the end of 2041 after 35 years' service. Her retirement is expected to span 18 years. Davenport's salary is $91,000 at the end of 2021 and the company's actuary projects her salary to be $285,000 at retirement. The actuary's discount rate is 9%. (FV of $1, PV of $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD of $1) (Use appropriate factor(s) from the tables provided.) Required: 2. Estimate by the projected benefits approach the amount of Davenport's annual retirement payments earned as of the end of 2021. 3. What is the company's projected benefit obligation at the end of 2021 with respect to Davenport? (Do not round intermediate calculations. Round your final answer to the nearest whole dollar.) 4. If no estimates are changed in the…
Flounder, 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, 2020. 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. 15 years 11 years $811.400 per year The interest rate to be used is 8%. Click here to view factor tables On the basis of the information…
s
Pearsall Company has a defined benefit pension plan. On December 31 (the end of the fiscal year), the company received the PBO report from the actuary. The following information was included in the report: ending PBO, $112,000; benefits paid to retirees, $11,500; interest cost, $6,500. The discount rate applied by the actuary was 10%. What was the service cost for the year? Multiple Choice $52,000. $5,000. $94,000. $18,000. There is no correct answer.
Three employees of the Horizon Distributing Company will receive annual pension payments from the company when they retire. The employees will receive their annual payments for as long as they live. Life expectancy for each employee is 14 years beyond retirement. Their names, the amount of their annual pension payments, and the date they will receive their first payment are shown below: Employee Tinkers Evers Annual Payment $ 27,000 Date of First Payment 12/31/2027 32,000 37,000 12/31/2028 12/31/2029 Chance Required: 1. Compute the present value of the pension obligation to these three employees as of December 31, 2024. Assume an 11% interest rate. 2. The company wants to have enough cash invested at December 31, 2027, to provide for all three employees. To accumulate enough cash, they will make three equal annual contributions to a fund that will earn 11% interest compounded annually. The first contribution will be made on December 31, 2024. Compute the amount of this required annual…
Sachs Brands's defined benefit pension plan specifies annual retirement benefits equal to 1.5 % x service years x final year's salary, payable at the end of each year. Angela Davenport was hired by Sachs at the beginning of 2010 and is expected to retire at the end of 2044 after 35 years' service. Her retirement is expected to span 18 years. Davenport's salary is $98,000 at the end of 2024 and the company's actuary projects her salary to be $320,000 at retirement. The actuary's discount rate is 8%. At the beginning of 2025, changing economic conditions caused the actuary to reassess the applicable discount rate. It was decided that 9% is the appropriate rate. Note: Use tables, Excel, or a financial calculator. (FV of $1, PV of $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD of $1) Required: Calculate the effect of the change in the assumed discount rate on the PBO at the beginning of 2025 with respect to Davenport. Note: Do not round intermediate calculations. Round your final answer to…
Pronghorn, 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. 15 years 11 years $816,100 per year The interest rate to be used is 8%. Click here to view factor tables. On the basis of the information…

SEE MORE QUESTIONS

Recommended textbooks for you

FINANCIAL ACCOUNTING

Accounting

ISBN:

9781259964947

Author:

Libby

Publisher:

MCG

Accounting

ISBN:

9781337272094

Author:

WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.

Publisher:

Cengage Learning,

Accounting Information Systems

Accounting

ISBN:

9781337619202

Author:

Hall, James A.

Publisher:

Cengage Learning,

FINANCIAL ACCOUNTING

Accounting

ISBN:

9781259964947

Author:

Libby

Publisher:

MCG

Accounting

ISBN:

9781337272094

Author:

WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.

Publisher:

Cengage Learning,

Accounting Information Systems

Accounting

ISBN:

9781337619202

Author:

Hall, James A.

Publisher:

Cengage Learning,

Horngren's Cost Accounting: A Managerial Emphasis…

Accounting

ISBN:

9780134475585

Author:

Srikant M. Datar, Madhav V. Rajan

Publisher:

PEARSON

Intermediate Accounting

Accounting

ISBN:

9781259722660

Author:

J. David Spiceland, Mark W. Nelson, Wayne M Thomas

Publisher:

McGraw-Hill Education

Financial and Managerial Accounting

Accounting

ISBN:

9781259726705

Author:

John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles

Publisher:

McGraw-Hill Education

SEE MORE TEXTBOOKS