On january 1 2008 bart company provided the following

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14.On January 1, 2008, Bart Company provided the following data in connectionwith its defined benefit plan:Fair value of plan assetsP6,500,000Accrued benefit obligation7,500,000The accountant revealed the following information for the year 2006:Current service costP1,600,000Interest cost10%Actual return on plan assets600,000Expected return on plan assets8%Contribution to the plan1,500,000Bart Company should report 2008 employee benefit expense at:(a) P2,350,000(b) P1,600,000(c) P1,830,000(d)P1,750,000Current service costP1,600,000Interest cost (10% x 7,500,000)750,000Expected return on plan assets (8% x 6,500,000)(520,000)Benefit expenseP1,830,000Actual returnP600,000Expected return(520,000)Actuarial gain – deferredP80,000Such actuarial gain will be included in the computation of the benefit expense forthe succeeding year under the “corridor” approach.C
15.Donna Company has a defined benefit plan with the following details on January1, 2008:ExpectedActualFair value of plan assetsP6,000,000P8,000,000Accrued benefit obligation5,500,0005,500,000At the beginning of 2008, the enterprise has determined that its averageremaining service period of active employees on such date is 10 years.What isthe amortization of the actuarial gain or loss that will be included in the 2008employee benefit expense?
16.On January 1, 2008, Brad Company had a defined benefit plan with the followingdetails:ExpectedActualFair value of plan assetsP6,000,000P8,000,000Accrued benefit obligation6,500,0007,000,000
Other relevant information for 2008 is as follows:Current service cost1,800,000Interest cost700,000Expected return on plan assets8%Contribution to the plan1,500,000Average service period of employees5 yearsThe employee benefit expense to be shown in the 2008 income statementshould be:C
17.On January 1, 2008, the memorandum records of Grant Company showed thefollowing balances related to its defined benefit plan:Fair value of plan assetsP9,000,000Accrued benefit obligation(P7,500,000)Unamortized past service cost500,000Prepaid/ accrued benefit cost2,000,000The remaining average vesting period for the employees covered by the pastservice cost is 5 years.The transactions affecting the defined benefit plan for2008 are as follows:Current service costP1,500,000Contribution to the planP1,600,000Interest cost800,000Benefits paid to retirees1,000,000Expected and actual returnon plan assets(500,000)The December 31, 2008 balance sheet should show prepaid benefit cost asnoncurrent asset at:A

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Term
Fall
Professor
N/A
Tags
Financial Accounting, Balance Sheet, Taxes, Generally Accepted Accounting Principles

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