particular employee on January 1,2024, was $36,000. The APBO at the beginning of the year was $7,200. The appropriate discount rate for this postretirement plan is 10%. The employee is expected to serve the company for a total of 25 years with 5 of those vears already served as of January 1,2024. What is the APBO On December 31, 2024

particular employee on January 1,2024, was $36,000. The APBO at the beginning of the year was $7,200. The appropriate discount rate for this postretirement plan is 10%. The employee is expected to serve the company for a total of 25 years with 5 of those vears already served as of January 1,2024. What is the APBO On December 31, 2024

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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Assume that Joseph Moore, age 30, begins employment with Carla Vista Corp. on January 1, 2022, at a starting salary of $38,010. It is expected that Joseph will work for Carla Vista for 35 years, retiring on December 31, 2056, when Joseph is 65 years old. If we estimate that Joseph's salary will increase approximately 4%, Joseph's salary at retirement is expected to be $150,000. Assume that mortality tables indicate the life expectancy of someone aged 65 in 2056 is 12 years. The company has the following pension benefit formula: Annual pension benefit on retirement = 2% final salary x years of service. A discount rate of 6% is assumed to be the current yield on high-quality debt instruments. Assume it is now 2024, three years after the defined benefit pension plan for Joseph Moore was initiated. In December 2024, Carla Vista's actuary provided the company with an actuarial revaluation of the plan. The actuary's assumptions included the following changes: Estimated final salary on…
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…
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.…
On June 1, 2021, Demer Consulting provides services to a customer for $150,000. To pay for the services, the customer signs a three-year, 12% note. The face amount is due at the end of the third year, while annual interest is due each June 1. Required: 1. Record the acceptance of the note on June 1, 2021.2. Record the interest collected on June 1 for 2022 and 2023, and the adjustment for interest revenue on December 31, 2021, 2022, and 2023.3. Record the cash collection on June 1, 2023. Record the acceptance of the note. please do a journal entry for each date. listed below. There should be 7 in total Date Jun 01, 2021 dec 31,2021 jan 01,2022 dec 31,2022 jun 01,2023 dec 31,2023 jun 01,2023
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…
Prince Distribution Incorporated has an unfunded postretirement benefit plan. Medical care and life insurance benefits are provided to employees who render 10 years service and attain age 55 while in service. At the end of 2024, Jim Lukawitz is 31. He was hired by Prince at age 25 (6 years ago) and is expected to retire at age 62. The expected postretirement benefit obligation for Lukawitz at the end of 2024 is $50,000 and $54,000 at the end of 2025. Calculate the accumulated postretirement benefit obligation at the end of 2024 and 2025 and the service cost for 2024 and 2025, as pertaining to Lukawitz. Note: Enter your answers in whole dollar amount. Round your final answers to the nearest whole dollar. APBO Service 2024 ____ _____ 2025 ____ _____
Garland Inc. offers a new employee a single-sum signing bonus at the date of employment, June 1, 2021. Alternatively, the employee can receive $39,000 at the date of employment plus $10,000 each June 1 for five years, beginning in 2025. Assuming the employee's time value of money is 9% annually, what single amount of the employment date would make the options equally desirable? (EV. of $1. PV of $1. EVA of $1. PVA of $1 EVAD of 51 and PVAD of 5) (Use appropriate factor(s) from the tables provided.) Pr
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…
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 years of service. The benefits provide 15 years' rimbursement for health care services of $21,000 annually, beginning one year from the date of retirement Ralph Young 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 3%. The plan is unfunded. The PV of an ordinary annuity of $1 where n-15 and/-3% is 1193794 The PV of $1 where n-2 and/-3% is 094260 With respect to Ralph, what is Oregon's expected postretirement beneft obligation (EPBO) et the end of 2024, rounded to the nearest dolar? Muple Choice O O O $122.195 $236,307 $60 1764.400
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 years of service. The benefits provide 15 years' reimbursement for health care services of $37,000 annually, beginning one year from the date of retirement. Ralph Young 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%. The plan is unfunded. The PV of an ordinary annuity of $1 where n=15 and /= 4% is 11.11839. The PV of $1 where n = 2 and /= 4% is 0.92456. With respect to Ralph, what is the interest cost to be included in Oregon's 2025 postretirement benefit expense, rounded to the nearest dollar? Multiple Choice О $14,434 О $14,509 О $15,398 None of these answer choices are correct Activate Wir Go to Settings to
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…