Question

A pension plan’s financial statements provide useful but limited information as to the plan’s fiscal condition. The following are the statements of plan net assets for 2013 and 2012 and the statement of changes in plan net assets for 2013 for Rockville School District Teachers Retirement Plan. All dollar amounts are in millions.
Statement of Changes in Plan Net Assets
For the Year Ended December 31, 2013
Additions:
Employer contributions................................................ $ 541
Interest and dividends .................................................. 630
Net depreciation in value of investments...................... (621)
Total additions.............................................................. $ 550
Deductions:
Benefits to which retirees are entitled during year...... $ 394
Administrative expenses.............................................. 11
Total deductions.......................................................... $ 405
Net increase................................................................. $ 145
Plan net assets, December 31, 2012............................ 9,361
Plan net assets, December 31, 2013............................ $ 9,506
1. Prepare a summary journal entry to record the employer contributions recognized during the year, the cash actually received from the employer during the year, and the change in the contributions receivable from previous years.
2. Prepare a journal entry to record the benefits paid to retirees.
3. Should the net depreciation in value of investments include unrealized as well as realized gains and losses? Why?
4. Based on the data provided, are you able to determine the obligation of the plan attributable to benefits earned by current and retired employees? Are you able to determine whether the financial health of the plan has improved or deteriorated in 2013? If not, where could you find this information?


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  • CreatedApril 29, 2015
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