The following information is given about a funded defined benefit plan of ROYCE Company. On January 1, 20x6, ROYCE Company initiated a pension plan for its employees. The company's actuary estimates that the present value of the retroactive benefits related to this pension plan amounts to P400,000. The remaining service life of the covered active employees is 10 years. Relevant data for 20x6 to 20x9 are as follows: 20x6 P68,000 8% 20x7 P100,000 P200,000 20x8 20x9 Current service cost Expected settlement rate Funding made at December 31 Expected rate of return. Actual return on plan assets (PA) P210,000 10%. 12% 5% P150,000 P165,000 P146,000 P300,000 10% 14% 10% Market value of PA at December 31 Actuarial DB0 at December 31 P15,000 P330,000 P500,000 P650,000 P1,000,000 P1,200,000 P825,000 Benefits paid to employees during 20x9 amounts to P100,000 NOTE: DBO = Defined Benefit Obligation

The following information is given about a funded defined benefit plan of ROYCE Company. On January 1, 20x6, ROYCE Company initiated a pension plan for its employees. The company's actuary estimates that the present value of the retroactive benefits related to this pension plan amounts to P400,000. The remaining service life of the covered active employees is 10 years. Relevant data for 20x6 to 20x9 are as follows: 20x6 P68,000 8% 20x7 P100,000 P200,000 20x8 20x9 Current service cost Expected settlement rate Funding made at December 31 Expected rate of return. Actual return on plan assets (PA) P210,000 10%. 12% 5% P150,000 P165,000 P146,000 P300,000 10% 14% 10% Market value of PA at December 31 Actuarial DB0 at December 31 P15,000 P330,000 P500,000 P650,000 P1,000,000 P1,200,000 P825,000 Benefits paid to employees during 20x9 amounts to P100,000 NOTE: DBO = Defined Benefit Obligation

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter19: Accounting For Post Retirement Benefits

Section: Chapter Questions

Problem 7E

See similar textbooks

Similar questions

Given the following information for Tyler Companys pension plan at the beginning of the year, calculate the corridor, excess net loss (gain), and amortized net loss (gain). Assume an average remaining service life of 15 years.
he following information relates to the pension plan for the employees of Cullumber Co.: (See Image) Cullumber estimates that the average remaining service life is 16 years. Cullumber's contribution was $ 1213000 in 2021 and benefits paid were $ 877000.The actual return on plan assets in 2021 is a. $ 2011000. b. $ 1134000. c. $ 798000. d. $ 336000.
The Marino Company has provided you the following information pertaining to its defined benefit pension plan that was adopted on January 1, 20X1: The service cost was $950,000 during 20X1 and $1,045,000 during 20X2. The prior service cost amortization each year was $290,000. The contribution to the pension plan was $1,500,000 on December 31, 20X1 and $1,800,000 on December 31, 20X2. The actuarially determined discount rate and the expected return on plan assets was 10%. The actual return on plan assets was 9.5%. Retirement benefits pertaining to years of service prior to 20X1 were granted to the employees. The prior service cost is being amortized over the remaining ten-year life of the employees. What is the pension expense for the year ended December 31, 20X2? Multiple Choice $1,335,000 $1,280,000 $1,185,000 $1,599,000
Cey Company has a defined benefit pension plan. Cey's policy is to fund net periodic pension cost annually, payment to an independent trustee being made 2 months after the end of each year. Data relating to the pension plan for year 5 are as follows: Net pension cost for year 5 Unrecognized prior service cost, 12/31/Y5 Accumulated benefit obligation, 12/31/Y5 Fair value of plan assets, 12/31/Y5 Projected benefit obligation 12/31/Y5 How much should appear on Cey's balance sheet at December 31, year 5, for pension liability? Current $190,000 $190,000 $0 Noncurrent $150,000 $330,000 $0 $190,000 150,000 480,000 500,000 500,000 $480,000
Rosaria Co. sponsors a defined benefit pension plan. For the current year ended December 31, thefollowing information relevant to the plan has been accumulated:Defined benefit obligation, 1/1 P11,250,000Fair value of plan assets, 1/1 10,500,000Current service cost 1,050,000Past service cost 2,200,000Actual return on plan assets 600,000Decrease in defined benefit obligation due tochanges in actuarial assumptions300,000Discount rate 8%Requirements:1. In the working papers computations, what balance of plan assets will be determined?2. In the working papers computations, what balance of benefit obligation will be determined?3. Calculate the amount that the entity would recognize in profit or loss for the year in accordancewith the revised PAS 19.4. Calculate the amount that the entity would recognize in other comprehensive income for theyear in accordance with the revised PAS 19.
The Marino Company has provided you the following information pertaining to its defined benefit pension plan that was adopted on January 1, 20X1: • The service cost was $950,000 during 20X1 and $1,045,000 during 20X2. • The prior service cost amortization each year was $290,000. • The contribution to the pension plan was $1,500,000 on December 31, 20X1 and $1,800,000 on December 31, 20X2. • The actuarially determined discount rate and the expected return on plan assets was 10%. • The actual return on plan assets was 9.5%. • Retirement benefits pertaining to years of service prior to 20X1 were granted to the employees. The prior service cost is being amortized over the remaining ten-year life of the employees. What is the balance of the projected benefit obligation as of December 31, 20X2?
On January 1, 20X1, Cello Co. established a defined benefit pension plan for its employees. At January 1, 20X1, Cello estimated the service cost for 20X1 to be $45,000. At January 1, 20X2, it estimated 20X2 service cost to be $49,000. On the plan inception date, prior service credit was granted to employees for five years, the period of time between the company's formation and plan inception. The prior service cost was estimated to be $650,000 at January 1, 20X1. Cello uses a 10% discount rate and assumes a return on plan assets of 9%. The average remaining service life of employees is 20 years, and the company will fund at the end of each year an amount equal to service cost plus interest cost for 20X1 and 20X2. December 31, 20X2 20X1 PBO Benefits paid at 12/31 Fair value of plan assets 2,000 ? Contributions at 12/31 Actual return on plan assets ? 3,200 Required: 1. Compute the amount of prior service cost to be included as a component of pension expense for 20X1. 2. Compute pension…
On January 1, 20X1, Cello Co. established a defined benefit pension plan for its employees. At January 1, 20X1, Cello estimated the service cost for 20X1 to be $45,000. At January 1, 20X2, it estimated 20X2 service cost to be $49,000. On the plan inception date, prior service credit was granted to employees for five years, the period of time between the company’s formation and plan inception. The prior service cost was estimated to be $650,000 at January 1, 20X1. Cello uses a 10% discount rate and assumes a return on plan assets of 9%. The average remaining service life of employees is 20 years, and the company will fund at the end of each year an amount equal to service cost plus interest cost for 20X1 and 20X2. December 31, 20X2 20X1 PBO ? ? Benefits paid at 12/31 2,000 0 Fair value of plan assets ? 0 Contributions at 12/31 ? ? Actual return on plan assets 3,200 0 Required: 6-a. Compute the amount of prior service…
Gurung Co. has a noncontributory, defined benefit pension plan adopted on 1 January 20X5. On 31 December 20X5, the following information is available: For accounting purposes Interest rate used for pension amounts, 5%. Past service cost, granted as of 1 January 20X5, $360,000. This is also the defined benefit obligation on 1 January. Current service cost for 20X5, appropriately measured for accounting purposes, $83,000. For funding purposes Funding was $107,500 in 20X5 for all pension amounts. The payment was made on 31 December. • Actual earnings on fund assets, zero. Required: 1. Prepare a pension spreadsheet that summarizes relevant pension data for 20X5. Pension Obligation Plan Assets Pension Expense Net Pension Asset/Liab. 20X5 Beginning - PSC CSC Interest Funding Accumulated OCI