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Intermediate accounting questions

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Question;Accounting;17-9 U.S.M?s actuary;determined that 2013 service cost is $60,000. Both the expected and actual rate;of return on plan assets is 9%. The interest (discount) rate is 5%. U.S.M;contributed $120,000 to the pension fund at the end of 2013, and retirees were;paid $44,000 from plan assets.;Determine the following;amounts at the end of 2013;1);Pension;Expense;2);Projected;benefit obligation;3);Plan assets;4);Net pension;asset or net pension liability;5);Prepare;journal entries to record the pension expense, funding of plan assets, and;retiree benefit payments.;Is USM's pension plan underfunded or overfunded?;Explain.;17-14 The funded status of Hilton Paneling Inc.?s defined benefit;pension plan and the balances in prior service cost and the net gain- pensions;are given below.;($;in 000?s);2013 Beg Balances 2013 Ending Balances;Projected;benefit obligation $2,300 $2,501;Plan assets 2,400 2,591;Funded Status 100 90;Prior service;cost ? AOCI 325;300;Net Gain ? AOCI 330 300;Retirees were;paid $270,000 and the employee contribution to the pension fund was $245,000 at;the end of 2013. The expected rate of return on plan assets was 10%, and the;actuary?s discount rate is 7%. There were no changes in actuarial estimates and;assumptions regarding the PBO.;Determine the following amounts;1;Actual;return on plan assets;2;Loss;or Gain on plan assets;3;Service;cost;4;Pension;expense;Briefly explain how Hilton would have accounted for changes to;actuarial estimates and assumptions regarding its PBO, if;any changes in estimates and/or assumptions had been made.;CMA;Questions 1 and 2;Briefly explain choices.;1);The;projected benefit obligations (PBO) is best described as the;a) Present value of benefits;accrued to date based on future salary levels;b) Present value of;benefits accrued to date based on current salary levels;c) Increase in;retroactive benefits at the date of the amendment of the plan;d) Amount of the;adjustment necessary to reflect the difference between actual and estimated;actuarial returns;2);On November 30, the Board of;Directors of Baldwin Corp amended its pension plan giving retroactive benefits;to its employees. The information below is provided at November 30.;Accumulated benefit obligation (ABO) $825,000;Projected benefit obligation (PBO) 900,000;Plan assets (fair value) 307,000;Market related asset value 301,150;Prior service cost 190,000;Average remaining service life of employees 10 years;Useful life of pension goodwill 20 years;Using the straight line method of;amortization, the amount of prior service cost charged to expense during the;year ended November 30 is;a);$9,500;b);$19,000;c);$30,250;d);$190,000

 

Paper#50141 | Written in 18-Jul-2015

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