Reference no: EM132997921

Questions -

Q1. Lisa Company showed the following reports on the beginning of the year:

Fair value of plan assets 3,000,000

Defined benefit obligation 7,000,000

Discount rate 10%

Expected return 8%

What amount should be reported as net interest expense?

a. 700,000 b. 300,000 c. 400,000 d. 240,000

Q2. Bernard Company provided the following information pertaining to its defined benefit plan on December 31, 2020:

Fair value of plan asset 4,350,000

Projected benefit obligation 2,350,000

Asset ceiling 1,000,000

Expected return on pension fund 500,000

What is the effect on asset ceiling?

a. 1,000,000 b. 4,350,000 c. 1,500,000 d. 500,000

Q3. Albert Company had a noncontributory defined benefit pension plan. The entity received the projected benefit obligation report from the independent actuary at year-end.

Pension Fund 135,000

PBO December 31 2,160,000

Interest expense 120,000

Discount rate 8%

1 What is the projected benefit obligation on January 1?

a. 1,500,000 b. 2,160,000 c. 1,687,500 d. 1,987,200

2 What is the current service cost for the current year?

a. 675,000 b. 810,000 c. 540,000 d. 225,000

Q4. On January 2, 2020, Albert Corp. presented the fair value of the plan assets at 6,300,000 and Projected benefit obligation was amounted to 6,125,000. During 2020, the company reported current service cost of 220,000 and actual return on Plan assets was 500,000. The settlement rate was discovered to be 9%.

On December 31, 2020, The Projected benefit obligation was 6,223,000.

1. What was the actuarial gain or loss on PBO during 2020?

a. 637,520 b. 673,520 c. 673,250 d. 637,250

2. Interest Income for the year was?

a. 675,000 b. 576,000 c. 567,000 d. 765,000

Q5. At the beginning of the year, Cherrie Company reported fair value of plan assets at 5,000,000 and projected benefit obligation of 4,950,000.

During the year, it was determined that the current service cost was 1,050,000, past service cost of 750,000 and discount rate is 11%. The actual return on plan asset was 750,000. Other information during the year related to the benefit plan are as follows:

Contribution to the plan 1,100,000

Benefits paid to the retirees 90,000

Decrease in projected benefit obligation 150,000

1. What amount should be reported as employee benefit expense?

a. 1,794,500 b. 1,800,500 c. 1,944,500 d. 1,956,400

2. What amount should be reported as total remeasurement gain?

a. 300,500 b. 350,000 c. 350,500 d. 355,000