Plan Funding Consolidated Industries is planning to operate for 10 more years and then cease operations. At that time (in 10 years), it expects to have the following pension benefit obligations: Year 11-15 16-20 21-25 Annual Total Payment $3,500,000 3,000,000 2,500,000 26-30 31-35 2,000,000 1,500,000 The current value of the firm's pension fund is $6.1 million. Assume that all cash flows occur at year-end. a. Consolidated's expected return on pension assets is 12%, and it uses 12% to discount the expected pension benefit payments. What is the present value of the firm's pension fund benefits? Do not round intermediate calculations. Round your answer to the nearest dollar. $ b. Is the plan underfunded or overfunded? Do not round intermediate calculations. Round your answer to two decimal places. Funding ratio = which means the assets are -Select- than the PV of benefits and the plan is -Select- ☑. Less or Greater Overfunded or Underfunded

Plan Funding Consolidated Industries is planning to operate for 10 more years and then cease operations. At that time (in 10 years), it expects to have the following pension benefit obligations: Year 11-15 16-20 21-25 Annual Total Payment $3,500,000 3,000,000 2,500,000 26-30 31-35 2,000,000 1,500,000 The current value of the firm's pension fund is $6.1 million. Assume that all cash flows occur at year-end. a. Consolidated's expected return on pension assets is 12%, and it uses 12% to discount the expected pension benefit payments. What is the present value of the firm's pension fund benefits? Do not round intermediate calculations. Round your answer to the nearest dollar. $ b. Is the plan underfunded or overfunded? Do not round intermediate calculations. Round your answer to two decimal places. Funding ratio = which means the assets are -Select- than the PV of benefits and the plan is -Select- ☑. Less or Greater Overfunded or Underfunded

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter19: Accounting For Post Retirement Benefits

Section: Chapter Questions

Problem 3RE: Pinecone Company has plan assets of 500,000 at the beginning of the current year and expects to earn...

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Consolidated Industries is planning to operate for 10 more years and then cease operations. At that time (in 10 years), it expects to have the following pension benefit obligations: Year 11-15 16-20 Annual Total Payment $3,100,000 2,600,000 2,100,000 21-25 26-30 31-35 1,600,000 1,100,000 The current value of the firm's pension fund is $6.5 million. Assume that all cash flows occur at year-end. a. Consolidated's expected return on pension assets is 6%, and it uses 6% to discount the expected pension benefit payments. What is the present value of the firm's pension fund benefits? Do not round intermediate calculations. Round your answer to the nearest dollar. $ b. Is the plan underfunded or overfunded? Do not round intermediate calculations. Round your answer to two decimal places. Funding ratio = which means the assets are -Select- than the PV of benefits and the plan is -Select-
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Smith, Inc. has a pension plan with the following data available for 20X1 and 20X2: 20X1 20X2 $ 30,000 $ 34,000 $ 18,000 $ 20,000 $ 15,000 $ 21,600 $200,000 $240,000 Service cost Interest cost Actual return on plan assets Beginning of year plan assets Discount rate 8% 8% Expected return on plan assets 8% 8% The adjustment to OCI for gain or loss from the return on plan assets for 20X1 is:
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Howard, Inc. established a defined benefit pension plan two years ago. Details related to the pension plan are as follows: Defined benefit, noncontributory plan with immediate full vesting. Benefits paid at the end of each retirement year beginning at age60. Expected11% rate of return on plan assets. December 31, 20X4 December 31, 20X5 Projected benefit obligation $840,000 $1,336,000 Fair & market-related value of plan assets $869,800 1,394,176 Accumulated benefit obligation 700,000 800,000 Additional information: Howard funded $440,000to the plan on December 31, 20X5 Howard's discount is10%. Average remaining service period of active employees is20 years. Service cost for20X5 is $432,000. Howard did not award retroactive benefits when the plan was adopted. Unrecognized prior net gain on January1, 20X5 was $4,150. Benefits paid $20,000 Calculate and record Howard's minimum required net periodic pension cost for 20X5.Debit Credit Cash $250,000 Accounts Receivable $757,800…
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