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Becker_Review_Problems_Week_3 - Ch20

# Becker_Review_Problems_Week_3 - Ch20 - BECKER REVIEW...

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BECKER REVIEW PROBLEMS Week Three NEW CPA QUESTION The following is taken from the Becker CPA Review with permission: The following information pertains to Maple Co’s defined benefit pension plan for 2004: Fair value of plan assets, beginning of year \$350,000 Fair value of plan assets, end of year 525,000 Employer contributions 110,000 Benefits paid 85,000 In computing pension expense, what amount should Maple use as actual return on plan assets? a. \$ 65,000 b. \$ 150,000 c. \$ 175,000 d. \$ 260,000 Remember to show calculations! Taken from Becker CPA Review with permission -- company name and dates changed F6/65-CPA-00690 Solution: Choice “b” is correct (SFAS 87 para 23): 350+110+x-85 = 525 X + 375 =525 X = 150 Beginning plan assets \$350,000 + Contributions 110,000 + Actual return 150,000 - Benefits paid ( 85,000) Ending Plan Assets \$525,000 Others incorrect. Year end plan assets equal beginning plan assets plus contributions less distributions plus actual return on plan assets

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NEW CPA QUESTION The following is taken from the Becker CPA Review with permission:
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Becker_Review_Problems_Week_3 - Ch20 - BECKER REVIEW...

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