Question 1

Gains and losses can occur with pension plans when:

Accepted Answer

A)   Either the PBO or the return on plan assets turns out to be different than expected.
B)   Either the ABO or the return on plan assets turns out to be different than expected.
C)   Either the PBO, the ABO, or the return on plan assets turns out to be different than expected.
D)   Either the PBO or the ABO turns out to be different than expected.E) A) and B)
F) B) and C)

Question 2

ERISA made major changes in the requirements for pension plan:

Accepted Answer

A)   Vesting.
B)   Reporting.
C)   Taxing.
D)   Investing.E) None of the above
F) B) and D)

Question 3

The following incomplete (columns have missing amounts)  pension spreadsheet is for Old Tucson Corporation (OTC) .  
-What was the balance of the net pension asset/liability reported in the balance sheet at the end of the previous year?

Accepted Answer

A)   Net pension asset of $250 millions.
B)   Net pension asset of $442 millions.
C)   Net pension liability of $250 millions.
D)   Net pension liability of $442 millions.E) B) and C)
F) A) and B)

Question 4

Open Arms Industries has a noncontributory, defined benefit pension plan. During 2018, changing economic conditions caused the actuary to increase the assumed rate of salary progression.
Required:
1. Does the change create a gain or does it create a loss for Open Arms? Why?
2. Assuming the magnitude of the change is $7 million. Prepare the appropriate journal entry to record any 2018 gain or loss. (Ignore income taxes.) If Open Arms prepares its financial statements according to U.S. GAAP, how will the company report the gain or loss?
3. Would your response to question 2 differ if Open Arms prepares its financial statements according to International Financial Reporting Standards (IFRS)?

Accepted Answer

1. An increase in the assumed rate of sa...

Question 5

Amortizing a net loss for pensions will:

Accepted Answer

A)   Increase retained earnings and increase accumulated other comprehensive income.
B)   Decrease retained earnings and decrease accumulated other comprehensive income.
C)   Increase retained earnings and decrease accumulated other comprehensive income.
D)   Decrease retained earnings and increase accumulated other comprehensive income.E) C) and D)
F) A) and B)

Question 6

Listed below are five terms followed by a list of phrases that describe or characterize each of the terms. Match each phrase with the most correct term.
-Projected benefit obligation

Accepted Answer

A)  Future compensation levels estimated.
B)  Not contingent on continued employment.
C)  Gain from revised expectation of return plan assets.
D)  Increased by employer contributions.
E)  Excess over 10% of the larger of plan assets or PBO.F) A) and D)
G) A) and B)

Exam 17: Pensions and Other Postretirement Benefits

Amortizing a net loss for pensions will:

Correct Answer
verified

Correct Answer
verified
1. An increase in the assumed rate of sa...
View Answer

The following incomplete (columns have missing amounts) pension spreadsheet is for Old Tucson Corporation (OTC) . -What was the balance of the net pension asset/liability reported in the balance sheet at the end of the previous year?

Correct Answer
verified

ERISA made major changes in the requirements for pension plan:

Correct Answer
verified

Gains and losses can occur with pension plans when:

Correct Answer
verified

Listed below are five terms followed by a list of phrases that describe or characterize each of the terms. Match each phrase with the most correct term. -Projected benefit obligation

Correct Answer
verified

Exam 17: Pensions and Other Postretirement Benefits

Amortizing a net loss for pensions will:

Correct AnswerverifiedShow Answer

Correct Answerverified1. An increase in the assumed rate of sa...View AnswerShow Answer

The following incomplete (columns have missing amounts) pension spreadsheet is for Old Tucson Corporation (OTC) . -What was the balance of the net pension asset/liability reported in the balance sheet at the end of the previous year?

Correct AnswerverifiedShow Answer

ERISA made major changes in the requirements for pension plan:

Correct AnswerverifiedShow Answer

Gains and losses can occur with pension plans when:

Correct AnswerverifiedShow Answer

Listed below are five terms followed by a list of phrases that describe or characterize each of the terms. Match each phrase with the most correct term. -Projected benefit obligation

Correct AnswerverifiedShow Answer

Correct Answer
verified

Correct Answer
verified
1. An increase in the assumed rate of sa...
View Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified