Table: Selected information of Ouyang Inc. The estimated increase in the pension
ID: 2412341 • Letter: T
Question
Table: Selected information of Ouyang Inc.
The estimated increase in the pension obligation due to benefits earned by current employees of Ouyang Inc. in 2013 is:
Financial Information 2013 2012 Net income 19,282 17,263 Net periodic benefit cost 920 728 Pension information Benefit obligation Service cost 495 382 Ending balance 7,918 6,771 Plan assets Company contribution 293 277 Expected return on plan assets 2,738 2,482 Actuarial gain 182 273 Ending balance 8,231 7,827 Funded status 313 1,056 Unrecognized past service cost 109 89 Unrecognized actuarial loss (gain) 382 311 Net asset (liability) in the balance sheet 804 1,456Explanation / Answer
Option A is not correct as 920 is the final increase in liability, considering increase in benefits earned, actuarial gains/losses, finance cost etc
OPtion B is not correct as 293 mn is the contribution to plan asset and therefore, is not related to benefit costs
Option C is not correct
Option D is the net final liability and therefore, is not cost
Option E, ie. 495 mn is correct.Benefits earned by current employees is reflected in the current service cost. Current service cost mentioned for 2013 is 495 mn. Therefore, USD 495 mn is the right answer
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