3060059365

# 3060059365 - Exercise 17-6(\$ in millions PBO Beginning of...

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Exercise 17-6 (\$ in millions) PBO: Beginning of 2007 \$360 Service cost ? Interest cost 36 (10% x \$360) Loss (gain) on PBO 0 Less: Retiree benefits (54 ) End of 2007 \$465 Service cost = \$465 360 36 + 54 = \$123 million Exercise 17-7 (\$ in millions) Plan assets Beginning of 2007 \$700 Actual return 77 (11% x \$700) Cash contributions ? Less: Retiree benefits (66 ) End of 2007 \$750 Cash contributions = \$750 700 77 + 66 = \$39 million Exercise 17-8 (\$ in 000s) Service cost \$112 Interest cost (6% x \$850) 51 Expected return on the plan assets (\$99 actual, less \$9 gain*) (90) Amortization of prior service cost 8 Amortization of net loss–pensions 1 Pension expense \$82 * (11% x \$900) – (10% x \$900)

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Requirement 1 (\$ in millions) Service cost \$20 Interest cost 12 Expected return on the plan assets (\$9 actual, less \$1 gain) (8 ) Pension expense \$24 Requirement 2 Pension expense (calculated above) 24 Pension liability 24 Pension liability 20 Cash (given) 20 Exercise 17-19 B 1. Change in actuarial assumptions for a defined benefit pension plan. C 2. Determination that the accumulated benefits obligation under a pension plan exceeded the fair value of plan assets at the end of the previous year by \$17,000. The only pension-related amount on the balance sheet was prepaid pension costs of \$30,000. B 3. Pension plan assets for a defined benefit pension plan achieving a rate of return in excess of the amount anticipated. D
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## This note was uploaded on 04/07/2008 for the course DSF 334 taught by Professor Fs during the Spring '08 term at George Mason.

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3060059365 - Exercise 17-6(\$ in millions PBO Beginning of...

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