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The computation in 000s is as follows expected return

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The computation (in $ 000s) is as follows:Expected return$576(10% × $5,760)Actual return(504)(from question40)Loss on planassets$72
AACSB: Knowledge applicationAICPA: FN MeasurementBlooms: ApplyLearning Objective: 17-06 Describe how pension expense is a composite of periodic changes that occur inboth the pension obligation and the plan assets.Level of Learning: 3 HardTopic Area: Pension expense-Return on plan assets
42.The following information pertains to Havana Corporation's defined benefitpension plan:($ in 000s)20162017BeginningbalancesBeginningbalancesProjected benefitobligation($6,000)($6,504)Plan assets5,7606,336Prior service cost-AOCI600552Net loss-AOCI720786At the end of 2016, Havana contributed $696 thousand to the pension fundand benefit payments of $624 thousand were made to retirees. The expectedrate of return on plan assets was 10%, and the actuary's discount rate is 8%.There were no changes in actuarial estimates and assumptions regarding thePBO.What is the 2016 pension expense for Havana's plan?
An underfunded pension plan means that the:
Lindy Company's auditor discovered two errors. No errors were corrected during2015. The errors are described as follows:(1.) Merchandise costing $4,000 was sold to a customer for $9,000 on December 31,2015, but it was recorded as a sale on January 2, 2016. The merchandise wasproperly excluded from the 2015 ending inventory. Assume the periodic inventorysystem is used.(2.) A machine with a five-year life was purchased on January 1, 2015. The machinecost $20,000 and has no expected salvage value. No depreciation was taken in 2015or 2016. Assume the straight-line method for depreciation.Required:Prepare appropriate journal entries (assume the 2016 books have not been closed).Ignore income taxes.
Colorado Consulting Company has been using the sum-of-the-years'-digitsdepreciation method to depreciate some office equipment that was acquired at thebeginning of 2014. At the beginning of 2016, Colorado Consulting decided to changeto the straight-line method. The equipment cost $120,000 and is expected to have nosalvage value. The estimated useful life of the equipment is five years. Ignore incometaxes.Required:1. Prepare the appropriate journal entry, if any, to record the accounting change.2. Prepare the journal entry to record depreciation for 2016.

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Term
Spring
Professor
File
Tags
Depreciation, Income Statement, Expense, Generally Accepted Accounting Principles

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