Pension plan : This is the plan devised by corporations to pay the employees an income after their retirement, in the form of pension. Projected benefit obligation (PBO) : This is the estimated present value of future retirement benefits, accumulated based on the future compensation levels. To mention : The changes in PBO for the qualified plans, for Corporation T, for the years ended January 30, 2016 (2015) and January 31, 2015 (2014)

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Answer 1

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Definition Definition Financial statement that provides a snapshot of an organization's financial position at a specific point in time. It summarizes a company's assets, liabilities, and shareholder's equity, detailing what the company owns, what it owes, and what is left over for its owners. The balance sheet serves as a crucial tool to assess the financial health and stability of a company, as well as to help management make informed decisions about its future investments and financial obligations.

Chapter 17, Problem 1CCTC

(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.

Projected benefit obligation (PBO): This is the estimated present value of future retirement benefits, accumulated based on the future compensation levels.

To mention: The changes in PBO for the qualified plans, for Corporation T, for the years ended January 30, 2016 (2015) and January 31, 2015 (2014)

(2)

To determine

Plan assets: The assets which are used to satisfy the postretirement obligation, are held as a pension fund by the trustee, to invest the employer contributions, accumulate the earnings on investments, and pay the contributions plus earnings to the retired employees, are referred to as plan assets.

To mention: The changes in plan assets for the qualified plans, for Corporation T, for the years ended January 30, 2016 (2015) and January 31, 2015 (2014)

(3)

To determine

Funded status: The net difference of the total of projected benefit obligation (PBO) and pension plan assets are referred to as funded status. If the balance of PBO is more than plan assets, the difference is referred to as underfunded status, and reported as net pension liability on the balance sheet. If the balance of plan assets is more than PBO, the difference is referred to as overfunded status, and reported as net pension asset on the balance sheet.

To indicate: Whether the pension plan of Corporation T are underfunded or overfunded, for the years ended January 30, 2016 (2015) and January 31, 2015 (2014)

(4)

To determine

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 indicate: The components of pension expense for Corporation T, for the years ended January 30, 2016 (2015), January 31, 2015 (2014), and February 1,2014 (2013)

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Problem 17-9 (Static) Determine pension expense; PBO; plan assets; net pension asset or liability; journal entries [LO17-3, 17-4, 17-5, 17-6 ,17-7 ,17-8] Check my work U.S. Metallurgical Inc. reported the following balances in its financial statements and disclosure notes at December 31, 2020. Plan assets $400,000 320,000 Projected benefit obligation U.S.M's actuary determined that 2021 service cost is $60,000. Both the expected and actual rate of return on plan assets are 9%. The interest (discount) rate is 5%. U.S.M. contributed $120,000 to the pension fund at the end of 2021, and retirees were paid $44,000 from plan assets. (Enter your answers in thousands (L.e., 10,000 should be entered as 10).) Required: 1. What is the pension expense at the end of 2021? 2. What is the projected benefit obligation at the end of 2021? 3. What is the plan assets balance at the end of 2021? 4. What is the net pension asset or net pension liability at the end of 2021? 5. Prepare journal entries to…

QUESTION 3 Bacon Bad is a national diner that has set up a defined benefit pension plan for its employees. The company uses IFRS and has provided you with the following information pertaining to its pension plan: Pension obligation, December 31,2021 - $6854203 Plan assets, December 31, 2021 - $5906519 Interest rate on pension obligations - 3% Current service cost for the year (accrued at the end of the year) - $598059 Improvement in pension plan, effective on January 1, 2022 - $62000 Actuarial gain on change in assumptions - $0 Expected retum on plan assets -3% of plan assets Actual return on plan assets - $271186 Amounts remitted by employer to pension trust on January 1,2022 - $668416 Payments we do not need payment to retiree

Question 11 The following data are for the pension plan for the employees of Cullumber Company. 1/1/20 12/31/20 12/31/21 Accumulated benefit obligation $ 5400000 $ 5410000 $ 6850000 Projected benefit obligation 5560000 5770000 7530000 Plan assets (at fair value) 4600000 6230000 6780000 AOCL – net loss 0 975000 1000000 Settlement rate (for year) 9% 10% Expected rate of return (for year) 9% 8% Cullumber’s contribution was $861000 in 2021 and benefits paid were $751000. Cullumber estimates that the average remaining service life is 15 years.The actual return on plan assets in 2021 was $550000. $360000. $440000. $430000.

Answer 2

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Definition Definition Financial statement that provides a snapshot of an organization's financial position at a specific point in time. It summarizes a company's assets, liabilities, and shareholder's equity, detailing what the company owns, what it owes, and what is left over for its owners. The balance sheet serves as a crucial tool to assess the financial health and stability of a company, as well as to help management make informed decisions about its future investments and financial obligations.

Chapter 17, Problem 1CCTC

(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.

Projected benefit obligation (PBO): This is the estimated present value of future retirement benefits, accumulated based on the future compensation levels.

To mention: The changes in PBO for the qualified plans, for Corporation T, for the years ended January 30, 2016 (2015) and January 31, 2015 (2014)

(2)

To determine

Plan assets: The assets which are used to satisfy the postretirement obligation, are held as a pension fund by the trustee, to invest the employer contributions, accumulate the earnings on investments, and pay the contributions plus earnings to the retired employees, are referred to as plan assets.

To mention: The changes in plan assets for the qualified plans, for Corporation T, for the years ended January 30, 2016 (2015) and January 31, 2015 (2014)

(3)

To determine

Funded status: The net difference of the total of projected benefit obligation (PBO) and pension plan assets are referred to as funded status. If the balance of PBO is more than plan assets, the difference is referred to as underfunded status, and reported as net pension liability on the balance sheet. If the balance of plan assets is more than PBO, the difference is referred to as overfunded status, and reported as net pension asset on the balance sheet.

To indicate: Whether the pension plan of Corporation T are underfunded or overfunded, for the years ended January 30, 2016 (2015) and January 31, 2015 (2014)

(4)

To determine

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 indicate: The components of pension expense for Corporation T, for the years ended January 30, 2016 (2015), January 31, 2015 (2014), and February 1,2014 (2013)

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Answer 3

Question

Definition Definition Financial statement that provides a snapshot of an organization's financial position at a specific point in time. It summarizes a company's assets, liabilities, and shareholder's equity, detailing what the company owns, what it owes, and what is left over for its owners. The balance sheet serves as a crucial tool to assess the financial health and stability of a company, as well as to help management make informed decisions about its future investments and financial obligations.

Chapter 17, Problem 1CCTC

(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.

Projected benefit obligation (PBO): This is the estimated present value of future retirement benefits, accumulated based on the future compensation levels.

To mention: The changes in PBO for the qualified plans, for Corporation T, for the years ended January 30, 2016 (2015) and January 31, 2015 (2014)

(2)

To determine

Plan assets: The assets which are used to satisfy the postretirement obligation, are held as a pension fund by the trustee, to invest the employer contributions, accumulate the earnings on investments, and pay the contributions plus earnings to the retired employees, are referred to as plan assets.

To mention: The changes in plan assets for the qualified plans, for Corporation T, for the years ended January 30, 2016 (2015) and January 31, 2015 (2014)

(3)

To determine

Funded status: The net difference of the total of projected benefit obligation (PBO) and pension plan assets are referred to as funded status. If the balance of PBO is more than plan assets, the difference is referred to as underfunded status, and reported as net pension liability on the balance sheet. If the balance of plan assets is more than PBO, the difference is referred to as overfunded status, and reported as net pension asset on the balance sheet.

To indicate: Whether the pension plan of Corporation T are underfunded or overfunded, for the years ended January 30, 2016 (2015) and January 31, 2015 (2014)

(4)

To determine

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 indicate: The components of pension expense for Corporation T, for the years ended January 30, 2016 (2015), January 31, 2015 (2014), and February 1,2014 (2013)

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Answer 4

Question

Definition Definition Financial statement that provides a snapshot of an organization's financial position at a specific point in time. It summarizes a company's assets, liabilities, and shareholder's equity, detailing what the company owns, what it owes, and what is left over for its owners. The balance sheet serves as a crucial tool to assess the financial health and stability of a company, as well as to help management make informed decisions about its future investments and financial obligations.

Chapter 17, Problem 1CCTC

(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.

Projected benefit obligation (PBO): This is the estimated present value of future retirement benefits, accumulated based on the future compensation levels.

To mention: The changes in PBO for the qualified plans, for Corporation T, for the years ended January 30, 2016 (2015) and January 31, 2015 (2014)

(2)

To determine

Plan assets: The assets which are used to satisfy the postretirement obligation, are held as a pension fund by the trustee, to invest the employer contributions, accumulate the earnings on investments, and pay the contributions plus earnings to the retired employees, are referred to as plan assets.

To mention: The changes in plan assets for the qualified plans, for Corporation T, for the years ended January 30, 2016 (2015) and January 31, 2015 (2014)

(3)

To determine

Funded status: The net difference of the total of projected benefit obligation (PBO) and pension plan assets are referred to as funded status. If the balance of PBO is more than plan assets, the difference is referred to as underfunded status, and reported as net pension liability on the balance sheet. If the balance of plan assets is more than PBO, the difference is referred to as overfunded status, and reported as net pension asset on the balance sheet.

To indicate: Whether the pension plan of Corporation T are underfunded or overfunded, for the years ended January 30, 2016 (2015) and January 31, 2015 (2014)

(4)

To determine

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 indicate: The components of pension expense for Corporation T, for the years ended January 30, 2016 (2015), January 31, 2015 (2014), and February 1,2014 (2013)

Expert Solution & Answer

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Answer 5

Chapter 17, Problem 1CCTC

(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.

Projected benefit obligation (PBO): This is the estimated present value of future retirement benefits, accumulated based on the future compensation levels.

To mention: The changes in PBO for the qualified plans, for Corporation T, for the years ended January 30, 2016 (2015) and January 31, 2015 (2014)

(2)

To determine

Plan assets: The assets which are used to satisfy the postretirement obligation, are held as a pension fund by the trustee, to invest the employer contributions, accumulate the earnings on investments, and pay the contributions plus earnings to the retired employees, are referred to as plan assets.

To mention: The changes in plan assets for the qualified plans, for Corporation T, for the years ended January 30, 2016 (2015) and January 31, 2015 (2014)

(3)

To determine

Funded status: The net difference of the total of projected benefit obligation (PBO) and pension plan assets are referred to as funded status. If the balance of PBO is more than plan assets, the difference is referred to as underfunded status, and reported as net pension liability on the balance sheet. If the balance of plan assets is more than PBO, the difference is referred to as overfunded status, and reported as net pension asset on the balance sheet.

To indicate: Whether the pension plan of Corporation T are underfunded or overfunded, for the years ended January 30, 2016 (2015) and January 31, 2015 (2014)

(4)

To determine

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 indicate: The components of pension expense for Corporation T, for the years ended January 30, 2016 (2015), January 31, 2015 (2014), and February 1,2014 (2013)

Answer 6

Chapter 17, Problem 1CCTC

(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.

Projected benefit obligation (PBO): This is the estimated present value of future retirement benefits, accumulated based on the future compensation levels.

To mention: The changes in PBO for the qualified plans, for Corporation T, for the years ended January 30, 2016 (2015) and January 31, 2015 (2014)

Answer 7

Chapter 17, Problem 1CCTC

(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.

Projected benefit obligation (PBO): This is the estimated present value of future retirement benefits, accumulated based on the future compensation levels.

To mention: The changes in PBO for the qualified plans, for Corporation T, for the years ended January 30, 2016 (2015) and January 31, 2015 (2014)

Answer 8

(2)

To determine

Plan assets: The assets which are used to satisfy the postretirement obligation, are held as a pension fund by the trustee, to invest the employer contributions, accumulate the earnings on investments, and pay the contributions plus earnings to the retired employees, are referred to as plan assets.

To mention: The changes in plan assets for the qualified plans, for Corporation T, for the years ended January 30, 2016 (2015) and January 31, 2015 (2014)

Answer 9

(2)

To determine

Plan assets: The assets which are used to satisfy the postretirement obligation, are held as a pension fund by the trustee, to invest the employer contributions, accumulate the earnings on investments, and pay the contributions plus earnings to the retired employees, are referred to as plan assets.

To mention: The changes in plan assets for the qualified plans, for Corporation T, for the years ended January 30, 2016 (2015) and January 31, 2015 (2014)

Answer 10

(3)

To determine

Funded status: The net difference of the total of projected benefit obligation (PBO) and pension plan assets are referred to as funded status. If the balance of PBO is more than plan assets, the difference is referred to as underfunded status, and reported as net pension liability on the balance sheet. If the balance of plan assets is more than PBO, the difference is referred to as overfunded status, and reported as net pension asset on the balance sheet.

To indicate: Whether the pension plan of Corporation T are underfunded or overfunded, for the years ended January 30, 2016 (2015) and January 31, 2015 (2014)

Answer 11

(3)

To determine

Funded status: The net difference of the total of projected benefit obligation (PBO) and pension plan assets are referred to as funded status. If the balance of PBO is more than plan assets, the difference is referred to as underfunded status, and reported as net pension liability on the balance sheet. If the balance of plan assets is more than PBO, the difference is referred to as overfunded status, and reported as net pension asset on the balance sheet.

To indicate: Whether the pension plan of Corporation T are underfunded or overfunded, for the years ended January 30, 2016 (2015) and January 31, 2015 (2014)

Answer 12

(4)

To determine

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 indicate: The components of pension expense for Corporation T, for the years ended January 30, 2016 (2015), January 31, 2015 (2014), and February 1,2014 (2013)

Answer 13

(4)

To determine

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 indicate: The components of pension expense for Corporation T, for the years ended January 30, 2016 (2015), January 31, 2015 (2014), and February 1,2014 (2013)

Answer 14

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Answer 15

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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 the changes in pension plan assets for Corporation T for the years ended January 30, 2016 (2015) and January 31, 2015.

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Chapter 17 Solutions