Reference no: EM13755254
1. T. Wells Appeasement Group’s defined benefit pension plan specifies annual retirement benefits according to the following pension formula: 1.3% x service years x final year’s salary Benefits are payable at the end of each year in retirement. Marshall Butters, a representative employee in all aspects related to pensions, has worked for Wells since the beginning of 1984. The company expects Marshall to retire at the end of 2023. His current salary is $195,000, but the company projects that his final salary will be $210,000 at retirement. Whereas previously the company’s actuary had predicted that Marshall’s retirement would last 25 years, at the end of 2015, the actuary is now revising that estimate downward to 20 years. When calculating the pension benefit obligation, the actuary uses a discount rate of 7%.
a) Provide the journal entry to record 2015 interest and service costs related to Marshall’s pension benefit. b) Provide the appropriate journal entry to record the actuary’s change in estimate associated with Marshall’s pension benefit.
2. Continuing from question (1), Wells has 30 management employees who earn pension benefits. The actuary determines that management employees are sufficiently similar that it is reasonable to estimate the total PBO for the group by multiplying the PBO for the representative employee (Marshall) by 30. Following this approach, at the beginning of 2015, Wells’ beginning balances were $1.54 million for accumulated other comprehensive income attributable to pension net gains, $720,800 for accumulated other comprehensive income attributable to prior service costs, $15 million for pension plan assets, and $16 million for the pension obligation. These balances were the total pension account balances associated with all company employees receiving pension benefits. Wells contributed $500,000 to the pension fund during 2015. The expected returns on pension plan assets was 7%. Actual returns during the year were 5%.
a) Provide any 2015 journal entries needed to amortize total pension gains or losses or amounts related to prior service costs. b) Provide any necessary closing entries related to 2015 total other comprehensive income for pensions during the period. c) Provide any 2016 journal entries needed to amortize total pension gains or losses or amounts related to prior service costs.
|
Cost of a fixed asset
: Metropolis Country Club purchased a new tractor to be used for golf course maintenance. The tractor cost $64,200. Metropolis borrowed the purchase price from its bank on a 1-year, 7% note payable. Metropolis incurred the following costs:
|
|
What is the compensation expense at end of the second year
: On January 1, the company granted 150,000 stock options to key employees. Each option allows an employee to buy one share of $1 par common stock for $25, which was the market price of the shares on the grant date of January 1. In order to be able to ..
|
|
Types of accounting software
: What types of accounting software does your organization use? What are the benefits and limitations of this software? What is XBRL? How does it affect financial reporting?
|
|
How the effectivness of the technology overrides
: provide an example illustrating how the effectivness of the technology overrides any chance of a conflict with principles of beneficience, autonomy, fidelity, or justice
|
|
Entries needed to amortize total pension gains or losses
: T. Wells Appeasement Group’s defined benefit pension plan specifies annual retirement benefits according to the following pension formula: 1.3% x service years x final year’s salary Benefits are payable at the end of each year in retirement. Provide ..
|
|
Reporting in the financial statements
: Which depreciation method does Amazon use for reporting in the financial statements?
|
|
Topics of self-presentation and social perception
: Using 250-500 words, respond to the following: From your perspective, and the topics of self-presentation and social perception relate to the passage from Matthew 7:3-5, in which Jesus asks:
|
|
What was effect of supreme court decision board of education
: What was the effect of the supreme court decision brown v board of education?
|
|
Scientists believe about the origin of life on earth
: There is a summary statement concerning what scientists believe about the origin of life on earth. Summarize the three (3) current competing theories of the origin of life on Earth: it arrived from an extraterrestrial source, it originated as a he..
|