FRDQuiz_Pension1ans

FRDQuiz_Pension1ans - 12,000 a. What is the 2008 pension...

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Name________________________________ Financial Reporting and Disclosure- Quiz 1. Keero Inc. reported the following pension trust information in the notes. Fair value of plan assets $3,500 $3,700 Projected benefit obligation $3,700 $3,500 Accumulated benefit obligation $3,200 Actual return on assets 10% What is the funding position of the company’s pension trust reported in the notes? a. $200 underfunded b. $300 overfunded c. $200 overfunded d. $650 overfunded e. Other ____________ _______________ a. $200 underfunded; c. $200 overfunded 2. Castle Inc. reports the following information for 2008. Service cost $25,000 Actual return on plan assets 40,000 55,000 Expected return on plan assets 55,000 40,000 Interest cost 60,000 Cash payments to the Pension Trust
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Unformatted text preview: 12,000 a. What is the 2008 pension expense entry for the company based on this information? Pension exp $30,000 (25,000 + 60,000 55,000) Cash $12,000 Pension liability $18,000 Pension exp $45,000 (25,000 + 60,000 40,000) Cash $12,000 Pension liability $33,000 b. Castle Co. renegotiated its retirement benefit plan effective on July 1, 2008 . This results in a prior service obligation of $24,000. If the average remaining service life of the workers is 12 8 years, what impact will the change have on the companys pension expense for 2008? $1,000 extra expense ($24,000/12)*(1/2) $1,500 extra expense ($24,000/8)*(1/2) 1...
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This note was uploaded on 05/06/2008 for the course FERF drtgGDR taught by Professor Fr during the Spring '08 term at NYU.

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