Chapter 20 ACCOUNTING FOR PENSIONS

Chapter 20 ACCOUNTING FOR PENSIONS - Chapter 20: ACCOUNTING...

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Chapter 20: ACCOUNTING FOR PENSIONS AND POSTRETIREMENT BENEFITS 1. The following information pertains to Mellon Co.'s pension plan: Actuarial estimate of projected benefit obligation at 1/1/08 $72,000 Assumed discount rate 10% Service costs for 2008 $18,000 Pension benefits paid during 2008 $15,000 If no change in actuarial estimates occurred during 2008 , Mellon's projected benefit obligation at December 31 , 2008 was a. $64,200. b. $75,000. c. $79,200. d. $82,200. 2. Interest cost included in the net pension cost recognized for a period by an employer sponsoring a defined-benefit pension plan represents the a. shortage between the expected and actual returns on plan assets. b. increase in the projected benefit obligation due to the passage of time. c. increase in the fair value of plan assets due to the passage of time. d. amortization of the discount on unrecognized prior service cost. 3. On January 1, 2008 , Pratt Corp. adopted a defined-benefit pension plan. The plan's service cost of $300,000 was fully funded at the end of 2008 . Prior service cost was funded by a contribution of $120,000 in 2008 . Amortization of prior service cost was $48,000 for 2008 . What is the amount of Pratt’s prepaid pension cost at December 31 , 2008
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Chapter 20 ACCOUNTING FOR PENSIONS - Chapter 20: ACCOUNTING...

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