Unformatted text preview: s to the plan, Trader Joe’s contributes $0.50.
Assume that during fiscal 2010, Trader Joe’s had 2,000 employees and each
employee on average contributed $1,200 to the pension fund. What will Trader
Joe’s recognize as pension expense in fiscal 2009?
Under a defined contribution plan Trader Joe’s does not have to worry about what
is in the plan when an employee retires, it simply has to record its contribution for
the year as pension expense. Trader Joe’s will therefore recognize pension
expense of $1,200,000 (2,000 employees x $1,200 per employee x 0.5). As an
aside…Trader Joe’s is a very successful privately held company so its financial
information is not publicly available…and no one is talking at the company; Trader
Joe’s has never given an interview pertaining to its operations. Page 12 of 21 $ (1,011)
26 END-OF-CHAPTER MATERIAL LO 1
LO 3 CASES
S C-1 Analyzing Starbucks’ lease disclosures
The following questions pertain to Starbucks’ 2009 balance sheet and lease
footnote shown below.
1. Does Sta...
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- Spring '12
- Balance Sheet, Deferred tax, Generally Accepted Accounting Principles, Income tax in the United States