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Course 171038- Accounting For Pensions & Postretirement Benefits
  Final Exam
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171038v - Accounting For Pensions & Postretirement Benefits

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6 CPE Credit Hours

Final Exam
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Read 'Chapter 0: Course Material' & answer the following question(s):
1. The accumulated benefit obligation (ABO) measures
2. The projected benefit obligation (PBO) is the measure of pension obligation that
3. Differing measures of the pension obligation can be based on
4. In a defined-contribution plan, a formula is used that
5. Which of the following is NOT a characteristic of a defined-contribution pension plan?
6. In a defined-benefit plan, a formula is used that
7. Given the following pension information related to Woods, Inc. for the year 2X13, what is the amount of pension expense that Woods should report for 2X13? Service cost = $72,000; Interest on projected benefit obligation = $54,000; Interest on vested benefits = $24,000; Amortization of prior service cost due to increase in benefits = $12,000; Expected return on plan assets = $18,000. The amount of pension expense to be reported for 2X13 is
8. For a defined benefit pension plan, the discount rate used to calculate the projected benefit obligation is determined by the: I) Expected Return on Plan Assets, or II) the Actual Return on Plan Assets?
9. Interest cost included in the net pension cost recognized for a period by an employer sponsoring a defined benefit pension plan represents the
10. Alternative methods exist for the measurement of the pension obligation (liability). Which measure requires the use of future salaries in its computation?
11. The computation of pension expense includes all the following EXCEPT
12. The interest on the projected benefit obligation (PBO) component of pension expense
13. In accounting for a pension plan, any difference between the pension cost charged to expense and the payments into the fund should be reported as
14. Which of the following items should be included in pension expense calculated by an employer who sponsors a defined-benefit pension plan for its employees? I) Fair value of plan assets, or II) Amortization of prior service cost
15. A corporation has a defined-benefit plan. A pension liability will result at the end of the year if the
16. The actual return on plan assets
17. Rossi Company has a defined-benefit plan. At the end of 2X13, it has determined the following information related to its pension plan: Projected benefit obligation (PBO) = $$700,000; Accumulated benefit obligation (ABO) = $660,000; Fair value of pension plan assets = $610,000. What is the amount of pension liability that is reported in Rossi's balance sheet at the end of 2X13?
18. Rathke, Inc. has a defined-benefit pension plan covering its 50 employees. Rathke agrees to amend its pension benefits. As a result, the projected benefit obligation increased by $1,500,000. Rathke determined that all its employees are expected to receive benefits under the plan over the next 5 years. In addition, 20% are expected to retire or quit each year. Assuming that Rathke uses the years-of-service method of amortization for prior service cost, the amount reported as amortization of prior service cost in year one after the amendment is
19. When a company amends a pension plan, for accounting purposes, prior service costs should be
20. Gains and losses that relate to the computation of pension expense should be
21. The fair value of pension plan assets is used: I) to determine the corridor, and II) to calculate the expected return on plan assets.
22. Huggins Company has the following information at December 31, 2X13 related to its pension plan. What is the amount of pension asset/liability Huggins Company would recognize at December 31, 2X13? Projected benefit obligation (PBO) = $4,000,000; Accumulated benefit obligation (APO) = $3,200,000; Plan assets (fair value) = $4,200,000; Accumulated OCI = $300,000
23. Kraft, Inc. sponsors a defined-benefit pension plan. The expected return on plan assets and the settlement rate are both 10%. Given the following data that relates to the operation of the plan for the year 2X13, what is the amount of pension expense reported for 2X13? Service cost = $200,000; Contributions to the plan = $220,000; Actual return on plan assets = $180,000; Projected benefit obligation (PBO) (beginning of year) = $2,400,000; Market-related and fair value of plan assets (beginning of year) = $1,600,000.
24. Which of the following disclosures of pension plan information would not normally be required?
25. A pension fund gain or loss that is caused by a plant closing should be
26. Which of the following statements about the expected postretirement benefit obligation (EPBO) is not correct?
27. An employer's obligation for postretirement health benefits that are expected to be fully provided to or for an employee must be fully accrued by the date the
28. Bounty Co. provides postretirement healthcare benefits to employees who have completed at least 10 years’ service and are aged 55 years or older when retiring. Employees retiring from Bounty have a median age of 62, and no one has worked beyond age 65. Fletcher is hired at 48 years old. The attribution period for accruing Bounty's expected postretirement healthcare benefit obligation to Fletcher is during the period when Fletcher is aged
29. Given the following facts that relate to the Patton Co. postretirement benefits plan for 2X13, what is the amount of postretirement expense for 2X13? Service cost = $170,000; Discount rate = 9%; APBO, January 1, 2X13 = $1,500,000; EPBO, January 1, 2X13 = $2,000,000; Benefit payments to employees = $115,000.
30. The International Accounting Standards Board (IASB) has proposed changes to IFRS pension accounting including all of the following EXCEPT
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