1. The following information pertains to Kane Co.s defined benefit pension plan: Prepaid pension cost (net asset),...
Question:
1. The following information pertains to Kane Co.’s defined benefit pension plan:
Prepaid pension cost (net asset), January 1, 2009 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 2,000
Service cost. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19,000
Interest cost . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38,000
Expected return on plan assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22,000
Amortization of unrecognized prior service cost . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52,000
Employer contributions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40,000
In its December 31, 2009, balance sheet, what amount should Kane report as accrued pension cost (net liability)?
(a) $45,000
(b) $49,000
(c) $67,000
(d) $87,000
2. An employer’s obligation for postretirement health benefits that are expected to be provided to or for an employee must be fully accrued by the date the:
(a) Employee is fully eligible for benefits.
(b) Employee retires.
(c) Benefits are utilized.
(d) Benefits are paid.
3. The following data relate to Nola Co.’s defined benefit pension plan as of December 31,
2009:
Unfunded accumulated benefit obligation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $140,000
Unrecognized prior service cost . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45,000
Accrued pension cost. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 80,000
What amount should Nola report as excess of additional pension liability over unrecognized prior service cost in its statement of stockholders’ equity?
(a) $15,000
(b) $35,000
(c) $95,000
(d) $175,000
Step by Step Answer:
Intermediate Accounting
ISBN: 978-0324312140
16th Edition
Authors: James D. Stice, Earl K. Stice, Fred Skousen