Pension plan : This is the plan devised by corporations to pay the employees an income after their retirement, in the form of pension. Pension expense : Pension expense is an expense to the employer paid as compensation after the completion of services performed by the employees. Pension expense includes the following components: Service cost Interest cost Expected return on plan assets Amortization of prior service cost Amortization of net loss or net gain To reconcile : The beginning balance of Net Loss–OCI account with ending balance of Net Loss–OCI account related to pension plan

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Answer 1

Question

Chapter 17, Problem 17.11BYP

(1)

To determine

Pension plan: This is the plan devised by corporations to pay the employees an income after their retirement, in the form of pension.

Pension expense: Pension expense is an expense to the employer paid as compensation after the completion of services performed by the employees.

Pension expense includes the following components:

Service cost

Interest cost

Expected return on plan assets

Amortization of prior service cost

Amortization of net loss or net gain

To reconcile: The beginning balance of Net Loss–OCI account with ending balance of Net Loss–OCI account related to pension plan

(2)

To determine

The average service life of employees from the amortization of net loss or gain formula

(3)

To determine

Other postretirement benefits: The postretirement benefits which are provided by employers, other than pensions, like medical insurance, life insurance, and legal services, and healthcare benefits, are referred to as other postretirement benefits.

To reconcile: The beginning balance of Net Gain–OCI account with ending balance of Net Gain–OCI account related to other postretirement benefit plan

(4)

To determine

Net income, if Incorporation M had assumed 1% of lower health care trend for the year 2015, and the tax rate is 35%

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Coronado Fire, Inc. manufactures steel cylinders and nozzles for two models of fire extinguishers: (1) a home fire extinguisher and (2) a commercial fire extinguisher. The home model is a high-volume (54,000 units), half-gallon cylinder that holds 2 1/2 pounds of multi- purpose dry chemical at 480 PSI. The commercial model is a low-volume (10,200 units), two-gallon cylinder that holds 10 pounds of multi-purpose dry chemical at 390 PSI. Both products require 1.5 hours of direct labor for completion. Therefore, total annual direct labor hours are 96,300 or [1.5 hours x (54,000+10,200)]. Estimated annual manufacturing overhead is $1,566,090. Thus, the predetermined overhead rate is $16.26 or ($1,566,090 ÷ 96,300) per direct labor hour. The direct materials cost per unit is $18.50 for the home model and $26.50 for the commercial model. The direct labor cost is $19 per unit for both the home and the commercial models. The company's managers identified six activity cost pools and related…

Coronado Fire, Inc. manufactures steel cylinders and nozzles for two models of fire extinguishers: (1) a home fire extinguisher and (2) a commercial fire extinguisher. The home model is a high-volume (54,000 units), half-gallon cylinder that holds 2 1/2 pounds of multi- purpose dry chemical at 480 PSI. The commercial model is a low-volume (10,200 units), two-gallon cylinder that holds 10 pounds of multi-purpose dry chemical at 390 PSI. Both products require 1.5 hours of direct labor for completion. Therefore, total annual direct labor hours are 96,300 or [1.5 hours x (54,000+ 10,200)]. Estimated annual manufacturing overhead is $1,566,090. Thus, the predetermined overhead rate is $16.26 or ($1,566,090 ÷ 96,300) per direct labor hour. The direct materials cost per unit is $18.50 for the home model and $26.50 for the commercial model. The direct labor cost is $19 per unit for both the home and the commercial models. The company's managers identified six activity cost pools and related…

Answer 2

Question

Chapter 17, Problem 17.11BYP

(1)

To determine

Pension plan: This is the plan devised by corporations to pay the employees an income after their retirement, in the form of pension.

Pension expense: Pension expense is an expense to the employer paid as compensation after the completion of services performed by the employees.

Pension expense includes the following components:

Service cost

Interest cost

Expected return on plan assets

Amortization of prior service cost

Amortization of net loss or net gain

To reconcile: The beginning balance of Net Loss–OCI account with ending balance of Net Loss–OCI account related to pension plan

(2)

To determine

The average service life of employees from the amortization of net loss or gain formula

(3)

To determine

Other postretirement benefits: The postretirement benefits which are provided by employers, other than pensions, like medical insurance, life insurance, and legal services, and healthcare benefits, are referred to as other postretirement benefits.

To reconcile: The beginning balance of Net Gain–OCI account with ending balance of Net Gain–OCI account related to other postretirement benefit plan

(4)

To determine

Net income, if Incorporation M had assumed 1% of lower health care trend for the year 2015, and the tax rate is 35%

Expert Solution & Answer

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Check out a sample textbook solution

See solution

Answer 3

Question

Chapter 17, Problem 17.11BYP

(1)

To determine

Pension plan: This is the plan devised by corporations to pay the employees an income after their retirement, in the form of pension.

Pension expense: Pension expense is an expense to the employer paid as compensation after the completion of services performed by the employees.

Pension expense includes the following components:

Service cost

Interest cost

Expected return on plan assets

Amortization of prior service cost

Amortization of net loss or net gain

To reconcile: The beginning balance of Net Loss–OCI account with ending balance of Net Loss–OCI account related to pension plan

(2)

To determine

The average service life of employees from the amortization of net loss or gain formula

(3)

To determine

Other postretirement benefits: The postretirement benefits which are provided by employers, other than pensions, like medical insurance, life insurance, and legal services, and healthcare benefits, are referred to as other postretirement benefits.

To reconcile: The beginning balance of Net Gain–OCI account with ending balance of Net Gain–OCI account related to other postretirement benefit plan

(4)

To determine

Net income, if Incorporation M had assumed 1% of lower health care trend for the year 2015, and the tax rate is 35%

Expert Solution & Answer

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See solution

Answer 4

Question

Chapter 17, Problem 17.11BYP

(1)

To determine

Pension plan: This is the plan devised by corporations to pay the employees an income after their retirement, in the form of pension.

Pension expense: Pension expense is an expense to the employer paid as compensation after the completion of services performed by the employees.

Pension expense includes the following components:

Service cost

Interest cost

Expected return on plan assets

Amortization of prior service cost

Amortization of net loss or net gain

To reconcile: The beginning balance of Net Loss–OCI account with ending balance of Net Loss–OCI account related to pension plan

(2)

To determine

The average service life of employees from the amortization of net loss or gain formula

(3)

To determine

Other postretirement benefits: The postretirement benefits which are provided by employers, other than pensions, like medical insurance, life insurance, and legal services, and healthcare benefits, are referred to as other postretirement benefits.

To reconcile: The beginning balance of Net Gain–OCI account with ending balance of Net Gain–OCI account related to other postretirement benefit plan

(4)

To determine

Net income, if Incorporation M had assumed 1% of lower health care trend for the year 2015, and the tax rate is 35%

Expert Solution & Answer

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See solution

Answer 5

Chapter 17, Problem 17.11BYP

(1)

To determine

Pension plan: This is the plan devised by corporations to pay the employees an income after their retirement, in the form of pension.

Pension expense: Pension expense is an expense to the employer paid as compensation after the completion of services performed by the employees.

Pension expense includes the following components:

Service cost

Interest cost

Expected return on plan assets

Amortization of prior service cost

Amortization of net loss or net gain

To reconcile: The beginning balance of Net Loss–OCI account with ending balance of Net Loss–OCI account related to pension plan

(2)

To determine

The average service life of employees from the amortization of net loss or gain formula

(3)

To determine

Other postretirement benefits: The postretirement benefits which are provided by employers, other than pensions, like medical insurance, life insurance, and legal services, and healthcare benefits, are referred to as other postretirement benefits.

To reconcile: The beginning balance of Net Gain–OCI account with ending balance of Net Gain–OCI account related to other postretirement benefit plan

(4)

To determine

Net income, if Incorporation M had assumed 1% of lower health care trend for the year 2015, and the tax rate is 35%

Answer 6

Chapter 17, Problem 17.11BYP

(1)

To determine

Pension plan: This is the plan devised by corporations to pay the employees an income after their retirement, in the form of pension.

Pension expense: Pension expense is an expense to the employer paid as compensation after the completion of services performed by the employees.

Pension expense includes the following components:

Service cost

Interest cost

Expected return on plan assets

Amortization of prior service cost

Amortization of net loss or net gain

To reconcile: The beginning balance of Net Loss–OCI account with ending balance of Net Loss–OCI account related to pension plan

Answer 7

Chapter 17, Problem 17.11BYP

(1)

To determine

Pension plan: This is the plan devised by corporations to pay the employees an income after their retirement, in the form of pension.

Pension expense: Pension expense is an expense to the employer paid as compensation after the completion of services performed by the employees.

Pension expense includes the following components:

Service cost

Interest cost

Expected return on plan assets

Amortization of prior service cost

Amortization of net loss or net gain

To reconcile: The beginning balance of Net Loss–OCI account with ending balance of Net Loss–OCI account related to pension plan

Answer 8

(2)

To determine

The average service life of employees from the amortization of net loss or gain formula

Answer 9

(2)

To determine

The average service life of employees from the amortization of net loss or gain formula

Answer 10

(3)

To determine

Other postretirement benefits: The postretirement benefits which are provided by employers, other than pensions, like medical insurance, life insurance, and legal services, and healthcare benefits, are referred to as other postretirement benefits.

To reconcile: The beginning balance of Net Gain–OCI account with ending balance of Net Gain–OCI account related to other postretirement benefit plan

Answer 11

(3)

To determine

Other postretirement benefits: The postretirement benefits which are provided by employers, other than pensions, like medical insurance, life insurance, and legal services, and healthcare benefits, are referred to as other postretirement benefits.

To reconcile: The beginning balance of Net Gain–OCI account with ending balance of Net Gain–OCI account related to other postretirement benefit plan

Answer 12

(4)

To determine

Net income, if Incorporation M had assumed 1% of lower health care trend for the year 2015, and the tax rate is 35%

Answer 13

(4)

To determine

Net income, if Incorporation M had assumed 1% of lower health care trend for the year 2015, and the tax rate is 35%

Answer 14

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Answer 15

Expert Solution & Answer

Answer 16

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Answer 17

Ch. 17 - Prob. 17.1Q Ch. 17 - Prob. 17.2Q Ch. 17 - Prob. 17.3Q Ch. 17 - What is the vested benefit obligation?Ch. 17 - Prob. 17.5Q Ch. 17 - Prob. 17.6Q Ch. 17 - Name three events that might change the balance of...Ch. 17 - Prob. 17.8Q Ch. 17 - Prob. 17.9Q Ch. 17 - Prob. 17.10Q

Solution Summary: The author explains how the pension plan is devised by corporations to pay employees an income after their retirement, in the form of pension.

The average service life of employees from the amortization of net loss or gain formula

Net income, if Incorporation M had assumed 1% of lower health care trend for the year 2015, and the tax rate is 35%

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Chapter 17 Solutions