6., RST Company offers a qualified retirement plan. Each employee contributes 4percent of his or her pretax income to the plan, and RST matches each employee'scontribution. An employee's benefit at retirement is determined by his or heraccount balance at the time of retirement. What type of retirement plan does RSToffer?a. Defined contribution plan.b. Defined benefit, flat percentage of annual earningsc. Defined benefit, unit-credit formula.d. Defined benefit, flat dollar amount for all employees

RST Company's retirement scheme is categorized as an employer-sponsored retirement plan,…

Answered: RST Company offers a qualified…

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

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1. Which of the following statements typifies defined contribution plans? Investment risk is borne by the corporation sponsoring the plan. O Retirement benefit is defined by a pension formula O The plans are more complex than defined benefit plans. O The employer's obligation is satisfied by making the periodic contribution to the plan.
True/False As long as an individuals emplyer has paid at leats 50% of the total contribution cost to fund and employee's pension, all pension plan payments received by the retired employee must be included in gross income of the retired employee.
Check my work Electronic Distribution has a defined benefit pension plan. Characteristics of the plan during 2021 are as follows: ($ millions $480 300 75 45 22 (36) 20 60 PBO balance, January 1 Plan assets balance, January 1 Service cost Interest cost Gain from change in actuarial assumption Benefits paid Actual return on plan assets Contributions 2021 The expected long-term rate of return on plan assets was 8%. There were no OCI 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 $12 million. Required: 1. Calculate the pension expense for 2021. 2. Prepare the journal entries to record (a) pension expense, (b) gains or losses, (c) prior service cost, (d) funding, and (e) payment of benefits for 2021. 3. What amount will Electronic Distribution report in its 2021 balance sheet as a net pension asset or net pension liability? Complete this question by entering your answers in the tabs below.…
The following information relates to Schmidt Sausage Company's defined benefit pension plan during the current reporting year: Plan assets beginning of the year Expected return on plan assets Actual return on plan assets Cash contributions Amortization of net loss Retiree benefits ($ in millions) Pension plan assets of the year $ 580 58 49 78 9 10 Required: Determine the amount of pension plan assets at fair value on December 31. Note: Enter your answers in millions.
s
Xerox reports the following pension and retiree health care ("Other") footnote as part of its 10-K report. Pension Benefits Retiree Health 2010 2009 2010 2009 (in millions) Change in Benefit Obligation Benefit obligation, January 1 $9,194 $8,495 $1,102 $1,002 Service cost 178 173 B 7 Interest cost 575 508 54 60 Plan participants' contributions 11 9 26 36 Plan amendments [19) 4 (86) 1 Actuarial loss (in) 477 209 13 124 Aquistions 140 1 1 Currency exchange rate changes (154) 373 6 15 (1) Curtailments Benefits paid/settlements Benefit obligation, December 31 Change in Plan Assets Fair value of plan assets, January 1 (670) [578] (118) (143) $9,731 $9,194 $1,006 $1,102 $7,561 $6,923 $- $- Actual return on plan assets 846 720 - Employer contribution 237 122 92 107 Plan participants' contributions 11 9 26 36 Aquistions 107 - - Currency exchange rate changes (144) 349 Benefits paid/settlements (669) 15781 (118) (143) Other (9) 16 Fair value of plan assets, December 31 Net funded status at…
A company using IFRS has the following information: Defined benefit obligation at beginning of year $12, 790; current service cost $570; actual return on pension assets $149; contributions made during the year $1, 030; Discount rate used on obligation 6%; payments made to pensioners during the year $135. What is the closing balance for the defined pension obligation?
Current accounting standards require that the discount rate used for pension plans be: Multiple Choice estimated future average market rates. the rates at which the pension benefits could effectively be settled. current market rate for the year. the average market rate since the beginning of the plan.
Give typing answer with explanation and conclusion . True or False: A Roth IRA is an employer-sponsored retirement account in which contributions are made with before-tax dollars, and your money grows tax-deferred until you make withdrawals in retirement.
The Employee Retirement Income Security Act (ERISA) was established to provide: Question 16 options: a) funding for retirement plans. b) mandatory retirement plans for self-employed individuals. c) protection to employees participating in private employer retirement plans. d) individual trust funds for employees retiring from jobs in the federal government. e) the ability to retain the same retirement insurance when employees change employers.
In a defined-benefit plan, a formula is used that Select one: a. requires that the benefit of gain or the risk of loss from the assets contributed to the pension plan be borne by the employee. b. requires that pension expense and the cash funding amount be the same. c. defines the contribution the employer is to make; no promise is made concerning the ultimate benefits to be paid out to the employees. d. defines the benefits that the employee will receive at the time of retirement.
Martin Services Company provides their employees vacation benefits and a defined contribution pension plan. Employees earned vacation pay of $39,500 for the period. The pension plan requires a contribution to the plan administrator equal to 9% of employee salaries. Salaries were $750,000 during the period. Hide a. Provide the journal entry for the vacation pay. Hide b. Provide the journal entry for the pension benefit.

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