Question 1. Presented below is pension information related to Woods, Inc. for the year 2013.
Service cost $76,000
Interest on projected benefit obligation $47,000
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 2013 is:
- $159,000.
- $117,000.
- $105,000.
- $141,000.
Question 2. Kasper, Inc. sponsors a defined-benefit pension plan. The following data relates to the operation of the plan for the year 2013.
Service cost $260,000
Contributions to the plan $250,000
Actual return on plan assets $240,000
Projected benefit obligation (beginning of year) $2,700,000
Fair value of plan assets (beginning of year) $2,900,000
The expected return on plan assets and the settlement rate were both 9%. The amount of pension expense reported for 2013 is:
- $503,000.00.
- $260,000.00.
- $242,000.00.
- $263,000.00.
Question 3. A pension asset is reported when:
- the fair value of the pension plan assets is less than the accumulated benefit obligation.
- the fair value of the pension plan assets is less than the accumulated benefit obligation and a prior service cost exists.
- the accumulated benefit obligation is less than the fair value of the pension plan assets.
- the projected benefit obligation is less than the fair value of the pension plan assets.
Question 4. Kathy's Kittens, Inc. has provided the following information for their post-retirement benefits plan for 2013.
Service cost $860,000
Discount rate 10%
APBO, January 1, 2013 $5,200,000
EPBO, January 1, 2013 $5,600,000
Average remaining service to full eligibility 20 years
Average remaining service to expected retirement 25 years
The amount of post-retirement expense for 2013 is:
- $1,380,000.
- $1,588,000.
- $1,640,000.
- $1,420,000.