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CH. 19 QUIZ WITH VERIFIED ANSWERS|100% CORRECT|GRADE A+
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CH. 19 QUIZ WITH VERIFIED ANSWERS|100% CORRECT|GRADE A+
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CH. 19 QUIZ WITH VERIFIEDANSWERS|100% CORRECT|GRADE A+
certified professionals who are trained to determine future risk are - ANSWER actuaries
they are certified professionals who are trained to determine future risk, estimate probabilities of future
events, make price decisions, estimate present values, and formulate investment strategies
the interest component of the net post-retirement benefit expense is based on the _________ while the
interest component of the pension expense is based on the _______. - ANSWER accumulated post-
retirement benefit obligation; projected benefit obligation
the interest component of the net post-retirement benefit expense is based on the accumulated post-
retirement benefit obligation, while the interest component of the pension expense is based on the
projected benefit obligation
matthew corporation began a defined benefit plan on january 1, 2016. during 2016, the service cost was
$450,000 to the pension plan for 2016. the actuary said the projected benefit obligation at december 31,
2016 was $450,000. as of december 31, 2016 - ANSWER the pension plan is fully funded and matthew
does not need to report a liability regarding the pension plan at december 31, 2016
using the given information, the pension plan is fully funded and matthew does not need to report a
liability for the pension plan at december 31, 2016
under the corridor approach, amortization of any net gain or loss is included in the pension expense of a
given year if at the - ANSWER beginning of the year, the cumulative net gain or loss exceeds 10% of the
greater of the beginning of the year projected benefit obligation or the beginning of the year fair value of
the plan assets
under the corridor approach, amortization of an net gain or loss is included in the pension expense of a
given year if the beginning of the year cumulative net gain or loss (included in accumulated other
comprehensive income) exceeds a "corridor." the corridor is defined as 10% of the greater of the
beginning of the year projected benefit obligation or the beginning of the year fair value of the plan
assets.
at the beginning of 2017, dashboard company amended its defined benefit plan. the amendment
entitled six active participating employees to receive increased future benefits based on their prior
service. brent's actuary determined that the prior service cost for this amendment amounts to $520,000.
employee A is expected to retire after 1 year, employee B after 3, employee C after 5, employee D after
7. under the straight-line method what is amortization to increase pension expense - ANSWER $130,000
, find average remaining in service life which is sum of years of remaining service divided by the number
of employees (1+3+5+7)/4 =4
then take total prior service cost divided by average remaining service life $520,000/4 = $130,000
which of the following is not one of the methods for companies to recognize gains and losses to pension
expense? - ANSWER maximum amortization using the corridor approach
which prior service cost method would violate the all-inclusive income concept because the amounts
would never be included in the income statement - ANSWER decrease retained earnings and record a
liability
current accounting guidance provides 3 methods for companies to recognize gains and losses in pension
expense: immediate recognition in pension expense, minimum amortization using the corridor
approach, any systematic and rational approach that results in faster amortization than the corridor
approach
the actuarial present value, at a specified date, of all the benefits attributed by the pension benefit
formula to employee service rendered prior to that date is called the - ANSWER projected benefit
obligation
the actuarial present value, at a specified date, of all the benefits attributed by the pension benefits
formula to employee service rendered prior to that date is called the projected benefit obligation
the interest rate that may be used to compute the service cost component of pension expense is equal
to the - ANSWER rate of return on high quality fixed-income investments
the discount (interest) rate used to calculate the service cost is the rate of return on high-quality fixed-
income investments currently available
which of the following statements is true? - ANSWER funding for post-retirement health care benefits is
not legally required, and contributions are not tax deductible
companies often do not fund other post-retirement benefits (OPRBs) because there are no legal
requirements and, although the payments for OPRB service are tax deductible, the contributions into the
plan are not tax-deductible
given the following information:
what is the pension expense for 2017?
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