Reference no: EM133005306
Questions -
Q1. KELLY Company recorded the fair value of plan assets at 7,400,000 at the beginning of the year. It was determined that the market value of the pension plan at that time was 6,900,000. Other related events were recorded by the company:
Pension benefits paid 800,000
Contribution to the fund 650,000
Actual return on plan assets 700,000
Discount rate 8%
1. What is the fair value of plan assets at the end of the year?
a. 7,800,000 b. 7,850,000 c. 7,900,000 d. 7,950,000
2. What is the remeasurement on plan assets?
a. 98,000 gain b. 98,000 loss c. 108,000 gain d. 108,000 loss
Q2. Kim Co. has the following balances relating to defined benefit plan on December 31, 2020: Fair value of plan assets 64,500,000, Projected benefit obligation 55,450,000 and Asset ceiling 3,500,000. What will be the amount of the effect on asset ceiling?
a. 0 b. 9,050,000 c. 3,500,000 d. 5,550,000
Q3. Catherine Company is fast leading Corporation which renders beauty services to customers. On January 1, 2019, it showed a projected benefit obligation of 32,000,000 and a pension fund with a fair value of 10,200,000. In addition, a decrease on PBO of 2,800,000 is recorded. The entity provided the additional data during the year:
Current service cost 13,000,000
Actual return on pension fund 1,000,000
Employer contribution 7,800,000
Benefits paid to retirees 8,500,000
Past service cost 3,000,000
Effect of asset ceiling 600,000
Discount rate 8%
Expected return on pension fund 10%
1. What is the pension expense for the current year?
a. 17,792,000 c. 16,816,000
b. 15,560,000 d. 16,048,000
2. What is the fair value of the pension fund on December 31?
a. 16,048,000 c. 10,500,000
b. 15,000,000 d. 18,500,000
3. What is the projected benefit obligation on December 31?
a. 39,260,000 c. 41,860,000
b. 34,000,000 d. 37,500,000
4. What is the remeasurement gain or loss on December 31?
a. 2,800,000 gain c. 2,948,000 loss
b. 2,984,000 gain d. 2,800,000 gain
5. What is the pension asset/liability on December 31?
a. 28,760,000 asset c. 28,760,000 liability
b. 39,260,000 asset d. 39,260,000 liability