AC 302 Week 5 EXAM Quiz 100% Correct
Question 1 The following information relates to Jackson Inc
For the Year Ended December 31,
2014 2015
Plan assets (at fair value) $1,360,000 $1,824,000
Pension expense 570,000 450,000
Projected benefit obligation 1,620,000 1,934,000
Annual contribution to plan 600,000 450,000
Accumulated OCI (PSC) 480,000 420,000
The amount reported as the liability for pensions on the December 31, 2015 balance sheet is
Question 2. Question : Rossi Company has a defined-benefit plan. At the end of 2015, it has determined the following information related to its pension plan:
Projected benefit obligation $730,000
Accumulated benefit obligation 660,000
Fair value of pension plan assets 610,000
The amount of pension liability that is reported in Rossi's balance sheet at the end of 2015 is
Question 3. Question : In determining the present value of the prospective benefits (often referred to as the projected benefit obligation), which of the following are considered by the actuary?
Question 4. Question : When a company adopts a pension plan, prior service costs should be charged to
Question 5. Question : The following information is related to the pension plan of Long, Inc. for 2015.
Actual return on plan assets $200,000
Amortization of net gain 82,500
Amortization of prior service cost due to increase in benefits 150,000
Expected return on plan assets 230,000
Interest on projected benefit obligation 362,500
Service cost 850,000
Pension expense for 2015 is
Question 6. Question : The following data are for the pension plan for the employees of Leonard Company.
1/1/13 12/31/13 12/31/14
Accumulated benefit obligation $2,500,000 $2,600,000 $3,400,000
Projected benefit obligation 2,700,000 2,800,000 3,700,000
Plan assets (at fair value) 2,300,000 3,000,000 3,300,000
AOCL - net loss -0- 480,000 500,000
Settlement rate (for year) 10% 9%
Expected rate of return (for year) 8% 7%
Leonard- contribution was $420,000 in 2014 and benefits paid were $375,000. Leonard
estimates that the average remaining service life is 15 years.
The actual return on plan assets in 2014 was
Question 7. Question : The following information relates to the pension plan for the employees of Turner Co.:
1/1/14 12/31/14 12/31/15
Accum. benefit obligation $6,160,000 $6,440,000 $8,400,000
Projected benefit obligation 6,510,000 6,972,000 9,338,000
Fair value of plan assets 5,950,000 7,280,000 8,036,000
AOCI - net (gain) or loss -0- (1,008,000) (1,120,000)
Settlement rate (for year) 11% 11%
Expected rate of return (for year) 8% 7%
Turner estimates that the average remaining service life is 16 years. Turner's contribution was $882,000 in 2015 and benefits paid were $658,000.
The actual return on plan assets in 2015 is
Question 8. Question : Differing measures of the pension obligation can be based on
Question 9. Question : Vested benefits
Question 10. Question : The following information relates to the pension plan for the employees of Turner Co.:
1/1/14 12/31/14 12/31/15
Accum. benefit obligation $6,160,000 $6,440,000 $8,400,000
Projected benefit obligation 6,510,000 6,972,000 9,338,000
Fair value of plan assets 5,950,000 7,280,000 8,036,000
AOCI - net (gain) or loss -0- (1,008,000) (1,120,000)
Settlement rate (for year) 11% 11%
Expected rate of return (for year) 8% 7%
Turner estimates that the average remaining service life is 16 years. Turner's contribution was $882,000 in 2015 and benefits paid were $658,000.
The unexpected gain or loss on plan assets in 2015 is
Question 11. Question : Foster Corporation received the following report from its actuary at the end of the year:
December 31, 2014 December 31, 2015
Projected benefit obligation $2,000,000 $2,200,000
Accumulated benefit obligation 1,300,000 1,480,000
Fair value of pension plan assets 1,380,000 1,440,000
The amount reported as the pension liability at December 31, 2014 is
Question 12. Question : In a defined-contribution plan, a formula is used that
Question 13. Question : A corporation has a defined-benefit plan. A pension liability will result at the end of the year if the
Question 14. Question : Which of the following statements is true about postretirement health care benefits?
Question 15. Question : Presented below is pension information related to Woods, Inc. for the year 2015:
Service cost $82,000
Interest on projected benefit obligation 54,000
Interest on vested benefits 24,000
Amortization of prior service cost due to increase in benefits 12,000
Expected return on plan assets 18,000
The amount of pension expense to be reported for 2015 is
Question 16. Question : The computation of pension expense includes all the following except
Question 17. Question : Whenever a defined-benefit plan is amended and credit is given to employees for years of service provided before the date of amendment
Question 18. Question : A pension fund gain or loss that is caused by a plant closing should be
Question 19. Question : Foster Corporation received the following report from its actuary at the end of the year:
December 31, 2014 December 31, 2015
Projected benefit obligation $2,000,000 $2,200,000
Accumulated benefit obligation 1,300,000 1,480,000
Fair value of pension plan assets 1,380,000 1,440,000
The amount reported as the pension liability at December 31, 2015 is
Question 20. Question : Seigel Co. maintains a defined-benefit pension plan for its employees. At each balance sheet date, Yeager should report a pension asset / liability equal to the
Question 21. Question : The following information relates to Jackson, Inc.:
For the Year Ended December 31,
2014 2015
Plan assets (at fair value) $1,360,000 $1,824,000
Pension expense 570,000 450,000
Projected benefit obligation 1,620,000 1,934,000
Annual contribution to plan 600,000 450,000
Accumulated OCI (PSC) 480,000 420,000
The amount reported as the liability for pensions on the December 31, 2014 balance sheet is
Question 22. Question : Presented below is pension information related to Waters Company as of December 31, 2015:
Accumulated benefit obligation $3,000,000
Projected benefit obligation 3,500,000
Plan assets (at fair value) 3,750,000
Accumulated OCI (G / L) 100,000
The amount to be reported as Pension Asset / Liability as of December 31, 2015 is
Question 23. Question : The following information pertains to Hopson Co.'s pension plan:
Actuarial estimate of projected benefit obligation at 1/1/15 $72,000
Assumed discount rate 10%
Service costs for 2015 $28,000
Pension benefits paid during 2015 $15,000
If no change in actuarial estimates occurred during 2015, Hopson's projected benefit obligation at December 31, 2015 was
Question 24. Question : The following data are for the pension plan for the employees of Leonard Company.
1/1/13 12/31/13 12/31/14
Accumulated benefit obligation $2,500,000 $2,600,000 $3,400,000
Projected benefit obligation 2,700,000 2,800,000 3,700,000
Plan assets (at fair value) 2,300,000 3,000,000 3,300,000
AOCL - net loss -0- 480,000 500,000
Settlement rate (for year) 10% 9%
Expected rate of return (for year) 8% 7%
Leonard- contribution was $420,000 in 2014 and benefits paid were $375,000. Leonard
estimates that the average remaining service life is 15 years.
The corridor for 2014 was $300,000. The amount of AOCI-net loss amortized in 2014 was
Question 25. Question : Interest cost included in pension expense recognized for a period by an employer sponsoring a defined-benefit pension plan represents the
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