The interest cost included in the annual pension cost recorded by an employer sponsoring a defined benefit pension plan...
- The interest cost included in the annual pension cost recorded by an employer sponsoring a defined benefit pension plan represents the
a) difference between the expected and actual return on plan assets.
b) increase in the defined benefit obligation due to the passage of time.
c) increase in the fair value of plan assets due to the passage of time.
d) interest earned on the plan assets for the year.
- An experience gain or loss (adjustment) is
a) additional contributions made to the pension fund by the employer.
b) additional contributions made to the pension fund by the employees.
c) reduced payments made to retirees.
d) the difference between what has occurred and the previous actuarial assumptions.
- The objective of accounting for defined benefit plans is to
a) calculate the actual amounts employees will receive at retirement.
b) recognize the appropriate expense and liability over the accounting periods in which the related services are provided by the employees.
c) calculate the current service cost.
d) determine which employees’ rights have vested.
- The obligation for a defined contribution plan is calculated by
a) discounting the benefit the employee will receive at retirement.
b) add up contributions made plus interest earned less any benefits paid out.
c) the cumulative contributions made to the pension plan.
d) the amount the employer is obligated to contribute for the period.
- Who assumes the economic risk for defined benefit pension plans?
a) actuarials
b) trustees
c) employees
d) employers
Homework Answers
Answer 1.
option b is correct
increase in the defined benefit obligation due to the passage of time.
Answer 2.
option d is correct
the difference between what has occurred and the previous actuarial assumptions.
Answer 3.
option b is correct
recognize the appropriate expense and liability over the accounting periods
Answer 4.
option b is correct
add up contributions made plus interest earned less any benefits paid out.
Answer 5.
option d is correct
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The interest cost included in the annual pension cost recorded by an employer sponsoring a defined benefit pension plan...
The obligation for a defined contribution plan is calculated by a) discounting the benefit the employee...
The obligation for a defined contribution plan is calculated by a) discounting the benefit the employee will receive at retirement. b) add up contributions made plus interest earned less any benefits paid out. c) the cumulative contributions made to the pension plan. d) the amount the employer is obligated to contribute for the period.
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The following information pertains to Rembrandt Inc.'s pension plan for calendar 2017: Defined benefit obligation...
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Information regarding the defined benefit pension plan of Duncan Services included Plan assets, January 1 126,772...
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Exercise 20-13 Wildhorse Company sponsors a defined benefit pension plan. The corporation's actuary provides the following...
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Bonita Company sponsors a defined benefit pension plan. The corporation’s actuary provides the following information about...
Bonita Company sponsors a defined benefit pension plan. The
corporation’s actuary provides the following information about the
plan.
January 1,
2017
December
31, 2017
Vested benefit
obligation
$1,390
$1,750
Accumulated benefit
obligation
1,750
2,850
Projected benefit
obligation
2,350
3,540
Plan assets (fair value)
1,820
2,550
Settlement rate and expected
rate of return
10
%
Pension asset/liability
530
?
Service cost for the year
2017
440
Contributions (funding in
2017)
720
Benefits paid in 2017
220
(a) Compute the actual return...
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Term Answer Description ERISA A. This pension plan meets specified criteria established by the Internal Revenue Code. Vested rights B. The employee bears part of the contribution cost in this pension plan. c. Noncontributory pension plan Based on a formula, it computes the benefits, not contributions, to be paid out. Contributory pension plan D. Under this plan, the employer not only makes the contributions (based on a percentage of an employee's salary), controls the investment, and guarantees a given payout...
Bonita Company sponsors a defined benefit pension plan. The
corporation’s actuary provides the following information about the
plan.
January 1,
2017
December
31, 2017
Vested benefit
obligation
$1,390
$1,750
Accumulated benefit
obligation
1,750
2,850
Projected benefit
obligation
2,350
3,540
Plan assets (fair value)
1,820
2,550
Settlement rate and expected
rate of return
10
%
Pension asset/liability
530
?
Service cost for the year
2017
440
Contributions (funding in
2017)
720
Benefits paid in 2017
220
(a) Compute the actual return...
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