Question: The funded status of Hilton Paneling Inc.’
The funded status of Hilton Paneling Inc.’s defined benefit pension plan and the balances in prior service cost and the net gain–pensions, are given below ($ in thousands): 
Retirees were paid $270,000, and the employer contribution to the pension fund was $245,000 at the end of 2018. The expected rate of return on plan assets was 10%, and the actuary’s discount rate is 7%. There were no changes in actuarial estimates and assumptions regarding the PBO. Required: Determine the following amounts for 2018: 1. Actual return on plan assets 2. Loss or gain on plan assets 3. Service cost 4. Pension expense 5. Average remaining service life of active employees (used to determine amortization of the net gain)
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2018 Ending Balances 2018 Beginning Balances Projected benefit obligation $2,300 2,400 $2,501 Plan assets 2,591 Funded status 100 90 Prior service cost-AOCI 325 300 Net gain-AOCI 330 300
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> Borner Communications’ articles of incorporation authorized the issuance of 130 million common shares. The transactions described below effected changes in Borner’s outstanding shares. Prior to the transactions, Borner’s shareholders’ equity included the
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> LGD Consulting is a medium-sized provider of environmental engineering services. The corporation sponsors a noncontributory, defined benefit pension plan. Alan Barlow, a new employee and participant in the pension plan, obtained a copy of the 2018 financ
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> Macy’s, Inc., operates about 840 Macy’s and Bloomingdale’s department stores and furniture galleries in 45 states and U.S. territories as well as Bloomingdale’s Outlet stores, macys.com, and bloomingdales.com. Refer to the financial statements for the ye
> While doing some online research concerning a possible investment you come across an article that mentions in passing that a representative of Morgan Stanley had indicated that a company’s pension plan had benefited its reported earnings. Curiosity pique
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> Pension plan assets were $100 million at the beginning of the year and $104 million at the end of the year. At the end of the year, retiree benefits paid by the trustee were $6 million and cash invested in the pension fund was $7 million. What was the pe
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> Office Depot, Inc. is a leading global provider of products, services, and solutions for workplaces. The following is an excerpt from a disclosure note in the company’s annual report for the fiscal year ended December 31, 2015: Requir
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> Reproduced below are the journal entries related to Illustration 17–12 in this chapter that Global Communications used to record its pension expense and funding in 2018 and the new gain and loss that occurred that year. To focus on the
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> The following pension-related data pertain to Metro Recreation’s noncontributory, defined benefit pension plan for 2018 ($ in thousands): Required: Prepare a pension spreadsheet that shows the relationships among the various pension b
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> Electronic Distribution has a defined benefit pension plan. Characteristics of the plan during 2018 are as follows: __________________________________ ($ in millions) PBO balance, January 1 …………………………………………………… $480 Plan assets balance, January 1 …………………
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> IFRS and U.S. GAAP follow similar approaches to accounting for taxation. Nevertheless, differences in reported amounts for deferred taxes are among the most frequent between IFRS and U.S. GAAP. Why?
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> Refer to the situation described in E 17–8. In E 17–8 Pension data for Sterling Properties include the following: _____________________________________($ in thousands) Service cost, 2018 ………………………………………………………………………………. $112 Projected benefit obligation,
> Pension data for Sterling Properties include the following: _____________________________________($ in thousands) Service cost, 2018 ………………………………………………………………………………. $112 Projected benefit obligation, January 1, 2018 ………………………………………… 850 Plan assets (fair
> Pension data for Fahy Transportation Inc. include the following: ______________________________________($ in millions) Discount rate, 7% Expected return on plan assets, 10% Actual return on plan assets, 11% Projected benefit obligation, January 1 …………………
> Pension data for Millington Enterprises include the following: _________________________________________($ in millions) Discount rate, 10% Projected benefit obligation, January 1 ………………………………………………….. $360 Projected benefit obligation, December 31 ………………
> Kroger Co. is one of the largest retail food companies in the United States as measured by total annual sales. The Kroger Co. operates supermarkets, convenience stores, and manufactures and processes food that its supermarkets sell. Using EDGAR (www.sec.
> The following data relate to Voltaire Company’s defined benefit pension plan: _______________________________________($ in millions) Plan assets at fair value, January 1 …………………………………………………… $600 Expected return on plan assets ……………………………………………………………. 60
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> Indicate by letter whether each of the events listed below increases (I), decreases (D), or has no effect (N) on an employer’s periodic pension expense in the year the event occurs. Events _____ 1. Interest cost _____ 2. Amortization of prior service cos
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> Indicate by letter whether each of the events listed below increases (I), decreases (D), or has no effect (N) on an employer’s projected benefit obligation. Events _____ 1. Interest cost _____ 2. Amortization of prior service cost _____ 3. A decrease in
> What is intraperiod tax allocation?
> Access the FASB Accounting Standards Codification at the FASB website (www.fasb.org). Determine the specific citation for accounting for each of the following items: 1. The disclosure required in the notes to the financial statements for pension plan ass
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> Differentiate between the accumulated benefit obligation and the projected benefit obligation.
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> Data pertaining to the postretirement health care benefit plan of Sterling Properties include the following for 2018: ______________________________________($ in thousands) Service cost ………………………………………………………………………………………. $124 Accumulated postretirement b
> Lorin Management Services has an unfunded postretirement benefit plan. On December 31, 2018, the following data were available concerning changes in the plan’s accumulated postretirement benefit obligation with respect to one of Lorin’s employees: APBO a
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> Accounting for uncertainty in tax positions is prescribed by GAAP in FASB ASC 740–10: Income Taxes–Overall (previously FASB Interpretation No. 48 (FIN 48)). Describe the two-step process required by GAAP.
> Indicate with the appropriate letter the nature of each adjustment described below: Type of Adjustment A. Change in principle B. Change in estimate C. Correction of an error D. Neither an accounting change nor an error _____ 1. Change in actuarial assump
> The income tax disclosure note accompanying the January 31, 2016, financial statements of Walmart is reproduced below: Required: 1. Focusing on only the first part of Note 9, relating current, deferred, and total provision for income taxes, prepare a s
> Refer to the situation described in E 17–21. In E 17–21 Lacy Construction has a noncontributory, defined benefit pension plan. At December 31, 2018, Lacy received the following information: Projected Benefit Obligation ……………… ($ in millions) Balance, Ja
> Lacy Construction has a noncontributory, defined benefit pension plan. At December 31, 2018, Lacy received the following information: Projected Benefit Obligation ……………… ($ in millions) Balance, January 1 …………………………………………………….. $360 Service cost ……………………
> Refer to the data provided in E 17–19. In E 17–19 Beale Management has a noncontributory, defined benefit pension plan. On December 31, 2018 (the end of Beale’s fiscal year), the following pension-related data were available: Projected Benefit Obligatio
> Lamont Corporation has a pension plan in which the corporation makes all contributions and employees receive benefits at retirement based on the balance in their accumulated pension fund. What type of pension plan does Lamont have?
> Beale Management has a noncontributory, defined benefit pension plan. On December 31, 2018 (the end of Beale’s fiscal year), the following pension-related data were available: Projected Benefit Obligation ____________________($ in millions) Balance, Janu
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> Listed below are several terms and phrases associated with pensions. Pair each item from List A with the item from List B (by letter) that is most appropriately associated with it. List A List B 1. Future compensation levels estimated 2. All funding
> Actuary and trustee reports indicate the following changes in the PBO and plan assets of Douglas-Roberts Industries during 2018: Prior service cost at Jan. 1, 2018, from plan amendment at the beginning of 2015 (amortization: $4 million per year) â&
> A partially completed pension spreadsheet showing the relationships among the elements that comprise the defined benefit pension plan of Universal Products is given below. The actuary’s discount rate is 5%. At the end of 2016, the pensi
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> Suppose a tax reform bill is enacted that causes the corporate tax rate to change from 34% to 36%. How would this affect an existing deferred tax liability? How would the change be reflected in income?
> Additional disclosures are required pertaining to the income tax expense reported in the income statement. What are the needed disclosures?
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> What is a pension plan? What motivates a corporation to offer a pension plan for its employees?
