While doing some online research concerning a possible investment you come across an article that mentions inpassing that a representative of Morgan Stanley had indicated that a company’s pension plan had benefited itsreported earnings. Curiosity piqued, you seek your old Intermediate Accounting text.Required:1. Can the net periodic pension “cost” cause a company’s reported earnings to increase? Explain.2. Companies must report the actuarial assumptions used to make estimates concerning pension plans. Which estimate influences the earnings effect in requirement 1? Can any of the other estimates influence earnings? Explain.

While doing some online research concerning a possible investment you come across an article that mentions inpassing that a representative of Morgan Stanley had indicated that a company’s pension plan had benefited itsreported earnings. Curiosity piqued, you seek your old Intermediate Accounting text.Required:1. Can the net periodic pension “cost” cause a company’s reported earnings to increase? Explain.2. Companies must report the actuarial assumptions used to make estimates concerning pension plans. Which estimate influences the earnings effect in requirement 1? Can any of the other estimates influence earnings? Explain.

SWFT Essntl Tax Individ/Bus Entities 2020

23rd Edition

ISBN:9780357391266

Author:Nellen

Publisher:Nellen

Chapter3: Taxes On The Financial Statements

Section: Chapter Questions

Problem 2BD

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Question

While doing some online research concerning a possible investment you come across an article that mentions in
passing that a representative of Morgan Stanley had indicated that a company’s pension plan had benefited its
reported earnings. Curiosity piqued, you seek your old Intermediate Accounting text.
Required:
1. Can the net periodic pension “cost” cause a company’s reported earnings to increase? Explain.
2. Companies must report the actuarial assumptions used to make estimates concerning pension plans. Which estimate influences the earnings effect in requirement 1? Can any of the other estimates influence earnings? Explain.

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