Intermediate Accounting: Reporting And Analysis
3rd Edition
ISBN: 9781337788281
Author: James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher: Cengage Learning
expand_more
expand_more
format_list_bulleted
Question
Chapter 19, Problem 2C
1.
To determine
Explain the meaning of qualified pension plan and explain the manner in which a qualified pension plan would differ from a non-qualified plan.
2.
To determine
Explain the types of assumptions that are necessary to account the defined benefit pension plan, and explain whether the assumptions are also needed for a defined contribution.
3.
To determine
Describe the way in which Company C should estimate the service cost component of the net pension cost.
4.
To determine
Describe the way in which Company C should estimate the interest cost component of the net pension cost.
5.
To determine
Explain the manner in which company C should estimate the expected return on plan assets component of the net pension cost.
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solutionStudents have asked these similar questions
A company currently offers it’s employees a defined benefit pension plan, but is looking into changing to a defined contribution plan for new employees, the company reports under IFRS.
Within the notes, there is reference to the following: in relation to the pension extract (a)• Net pension liabilities/asset
• Employee service cost
• Net interest expense/income• Remeasurements
Explain what the main features are of a defined benefit and defined contribution pension plan and how they are included in the financial statements. With reference to the pension notes, describe each item and how any movement in those items would be recorded in the financial statements.
Which of the following is NOT computed by an Acturay on behlaf of a firm
Select one:
a. Total sales revenue
b. The pension obligation
c. THe annual cost of servicing the pension plan
d. The cost of amendments to the pension plan
Clear my choice
p
Chapter 19 Solutions
Intermediate Accounting: Reporting And Analysis
Ch. 19 - Prob. 1GICh. 19 - Prob. 2GICh. 19 - Prob. 3GICh. 19 - Prob. 4GICh. 19 - Prob. 5GICh. 19 - Prob. 6GICh. 19 - Prob. 7GICh. 19 - Prob. 8GICh. 19 - Prob. 9GICh. 19 - Prob. 10GI
Ch. 19 - Prob. 11GICh. 19 - Prob. 12GICh. 19 - Prob. 13GICh. 19 - Prob. 14GICh. 19 - Prob. 15GICh. 19 - Prob. 16GICh. 19 - Prob. 17GICh. 19 - Prob. 18GICh. 19 - Prob. 19GICh. 19 - Prob. 20GICh. 19 - Prob. 21GICh. 19 - Prob. 22GICh. 19 - Prob. 23GICh. 19 - The actuarial present value of all the benefits...Ch. 19 - Prob. 2MCCh. 19 - Prob. 3MCCh. 19 - Prob. 4MCCh. 19 - Prob. 5MCCh. 19 - Prob. 6MCCh. 19 - Which of the following is not a component of...Ch. 19 - Prob. 8MCCh. 19 - Prob. 9MCCh. 19 - Prob. 10MCCh. 19 - Prob. 1RECh. 19 - Prob. 2RECh. 19 - Pinecone Company has plan assets of 500,000 at the...Ch. 19 - Prob. 4RECh. 19 - Prob. 5RECh. 19 - Prob. 6RECh. 19 - Prob. 7RECh. 19 - Prob. 8RECh. 19 - Given the following information for Tyler Companys...Ch. 19 - At the beginning of Year 1, Cactus Company has...Ch. 19 - Prob. 11RECh. 19 - Prob. 1ECh. 19 - Prob. 2ECh. 19 - Prob. 3ECh. 19 - Prob. 4ECh. 19 - Prob. 5ECh. 19 - Prob. 6ECh. 19 - Prob. 7ECh. 19 - Prob. 8ECh. 19 - Prob. 9ECh. 19 - Prob. 10ECh. 19 - Prob. 11ECh. 19 - Prob. 12ECh. 19 - Prob. 13ECh. 19 - Refer to the information provided in E19-13....Ch. 19 - Prob. 15ECh. 19 - Prob. 16ECh. 19 - Prob. 1PCh. 19 - Prob. 2PCh. 19 - Prob. 3PCh. 19 - Prob. 4PCh. 19 - Prob. 5PCh. 19 - Prob. 6PCh. 19 - Prob. 7PCh. 19 - Prob. 8PCh. 19 - Prob. 9PCh. 19 - Prob. 10PCh. 19 - Prob. 11PCh. 19 - Prob. 12PCh. 19 - Prob. 1CCh. 19 - Prob. 2CCh. 19 - Prob. 3CCh. 19 - Prob. 4CCh. 19 - Prob. 5CCh. 19 - Prob. 6CCh. 19 - Prob. 7CCh. 19 - Prob. 9C
Knowledge Booster
Similar questions
- A company shows in its balance sheet, a provision for pension costs, Select one: a. This company has a defined benefit plan b. This company has a funded defined contribution plan c. This company has a defined contribution plan d. This company has a funded defined benefit planarrow_forward1. Plans qualifying for preferential tax treatment must meet minimum participation and vesting requirements. T/F 2. To obain special tax treatment, a company's pension plan must be "qualified." T/F 3. Which one of the following is not true of the Employee Retirement Income Security Act (ERISA)? It sets the minimum standards and requirements that the pension plan must meet. It seeks to ensure that all employees covered by pension plans receive the benefits due them under the plans. It does not apply to employee benefit plans that are established by federal, state, or local government employers. It requires an employer to provide a pension plan for its employees. 4. Which of the following is not true of the Employee Retirement Income Security Act (ERISA)? Group of answer choices It sets standards of conduct and responsibility upon pension fund fiduciaries. It applies to plans maintained solely for the purpose of complying with state workers'compensation. It requires pension plan…arrow_forwardQuestion text Dickson Manufacturing Corp., a company reporting under IFRS, has a defined benefit pension plan. Pension information concerning the 2020 fiscal year is presented below (in millions): Information provided by the pension plan trustee Fair value of plan assets, January 1, 2020 $1,600 Actual return on plan assets, 2020 224 The discount rate used in actuarial assumptions is 10%. What is the balance of the plan assets as at December 31, 2020? Select one: 17 а. $1,664 b. $1,824 c. $1,376 d. $1,760arrow_forward
- 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.arrow_forwardXerox 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…arrow_forwardIn determining the present value of the prospective benefits (often referred to as the defined benefit obligation), the following are considered by the actuary: retirement and mortality rate. interest rates. benefit provisions of the plan. all of these factors. In accounting for a defined-benefit pension plan an appropriate funding pattern must be established to ensure that enough monies will be available at retirement to meet the benefits promised. the employer's responsibility is simply to make a contribution each year based on the formula established in the plan. the expense recognized each period is equal to the cash contribution. the liability is determined based upon known variables that reflect future salary levels promised to employees. Alternative methods exist for the measurement of the pension obligation (liability). Which measure requires the use of future salaries in its computation? Vested benefit obligation Accumulated benefit obligation Defined benefit…arrow_forward
- Describe the reporting of pension plans for a companywith multiple plans, some of which are underfunded andsome of which are overfunded.arrow_forwardDescribe the reporting of pension plans for a company with multiple plans, some of which are underfunded and some of which are overfunded.arrow_forwardCullumber Company sponsors a defined benefit pension plan. The corporation's actuary provides the following information about the plan. Vested benefit obligation Accumulated benefit obligation Projected benefit obligation Plan assets (fair value) Settlement rate and expected rate of return Pension asset/liability Service cost for the year 2020 Contributions (funding in 2020) Benefits paid in 202- Actual return on the plan assets $ Net pension liability gains and losses $ (a) Compute the actual return on the plan assets in 2020. Net gain or loss amortization January 1, 2020 $1,640 (d) Compute pension expense for 2020. Pension expense 2,060 $ $ 2,390 1,770 620 230 December 31, 2020 $2,060 2,610 3,230 2,490 (b) Compute the amount of the other comprehensive income (G/L) as of December 31, 2020. (Assume the January 1, 2020, balance was zero.) (Enter loss using either a negative sign preceding the number e.g. -45 or parentheses e.g. (45).) 10 % ? (c) Compute the amount of net gain or loss…arrow_forward
- Luciana Fashions calculated pension expense for its underfunded pension plan as follows: Service cost Interest cost Expected return on the plan assets ($100 actual, less $10 gain). Amortization of prior service cost Amortization of net loss Pension expense by by ($ in millions) $ 224 ($ in millions) 150 (90) Required: Which elements of Luciana's balance sheet are affected by the components of pension expense? What are the specific changes in these accounts? Note: Enter your answers in millions. 8 2 $ 294arrow_forwardIn accounting for a defined-benefit pension plan __the expense recognized each period is equal to the cash contribution. ___the liability is determined based upon known variables that reflect future salary levels promised to employees. __the employer's responsibility is simply to make a contribution each year based on the formula established in the plan. __an appropriate funding pattern must be established to ensure that enough monies will be available at retirement to meet the benefits promised.arrow_forwardWhat benefits accrue to companies who elect to use pension funds? How does the use of a pension fund change the accounting that must be done with respect to employee pension amounts?arrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
- Individual Income TaxesAccountingISBN:9780357109731Author:HoffmanPublisher:CENGAGE LEARNING - CONSIGNMENTIntermediate Accounting: Reporting And AnalysisAccountingISBN:9781337788281Author:James M. Wahlen, Jefferson P. Jones, Donald PagachPublisher:Cengage Learning
- Financial Reporting, Financial Statement Analysis...FinanceISBN:9781285190907Author:James M. Wahlen, Stephen P. Baginski, Mark BradshawPublisher:Cengage Learning
Individual Income Taxes
Accounting
ISBN:9780357109731
Author:Hoffman
Publisher:CENGAGE LEARNING - CONSIGNMENT
Intermediate Accounting: Reporting And Analysis
Accounting
ISBN:9781337788281
Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:Cengage Learning
Financial Reporting, Financial Statement Analysis...
Finance
ISBN:9781285190907
Author:James M. Wahlen, Stephen P. Baginski, Mark Bradshaw
Publisher:Cengage Learning