The assets and liabilities of the pension plan itself are included in the financial statements of the plan: a. administrator c. sponsor d. trustee
Questions 5 - 6
Tally Inc Pens Plan Yr 7 Yr 8
Service cost 15,000 17,000
Interest cost 9,000 10,000
Actual return on plan assets 7,500 10,800
Beginning of year plan assets 100,000 120,000
Settlement rate 8% 8%
5) What is Talley pension expense to be recorded for Yr 7?
a. $15,000 b. $16,000 c. $16,500
6) What is Talley pension expense to be recorded for Yr 8?
a. $16,200 b. $17,000 c. $17,400
9) To compute amortization on the cumulative unrecognized gains and losses in a pension plan, the corridor is computed as 10% of:
a. Average of beginning balances of the plan assets and the projected benefit obligation
c. Greater of the beginning market related value of the plan assets or the projected benefit obligation
d. Lesser of the beginning market related value of the plan assets or the projected benefit obligation
11) if the PBO for a pension plan exceeds the fair value of the plan assets at the time of adoption of SFAS No 87, which is created?
a. Cumulative assets gain or loss c. Transition asset d. Transition liability
13) TRM Corp established a defined benefit pension plan in Yr 5. In Yr 8, the following information is available. Service cost = $45,000; Interest cost = $60,000; Actual return on plan assets = $35,000; Expected return on plan assets = $40,000; Net amortization of unrecognized losses = $15,000. If the company contributes $65,000 cash to the pension plan trustee, which entry properly records the payment?
a. DR Pension expense 45,000; DR prepaid pension cost 20,000; CR Cash 65,000
b. DR Pension expense 60,000; DR Prepaid pension cost 5,000; CR Cash 65,000
d. DR Pension expense 80,000; CR Cash 65,000; CR Unfunded accrued pension cost 15,000
18) A severly underfunded pension plan is one which the:
a. accumulated benefit obligation exceeds the present value of plan assets
b. Present value plan assets exceeds the accumulated benefit obligation
c. Present value plan assets exceeds the projected benefit obligation.