ACC3302 (30197) Intermediate Accounting II Examination II Chapters 19-20 15. In

Question

ACC3302 (30197) Intermediate Accounting II Examination II Chapters 19-20 15. In all pension plans, the accounting problems include all the following except a. measuring the amount of pension obligation. b. disclosing the status and effects of the plan in the financial statements C. allocating the cost of the plan to the proper periods. d. determining the level of individual premiums. 16. A corporation has a defined-benefit plan. A pension liability will result at the end of the year if the a. projected benefit obligation exceeds the fair value of the plan assets b. fair value of the plan assets exceeds the projected benefit c. amount of employer contributions exceeds the pension expense. d. amount of pension expense e Please use the following data to answer questions 17 and 18 On January 1, 2018, Newlin Co. has the following balances Projected benefit obligation Fair value of plan assets $3,500,000 3,000,000 The settlement rate is 10%. Other data related to the pension plan for 2018 are: Service cost Amortization of prior service costs due to increase in benefits Contributions Benefits paid Actual return on plan assets Amortization of net gain $300,000 100,000 500,000 225,000 395,000 30,000 17. The balance of the projected benefit obligation at December 31, 2018 is a. $4,150,000 b. $3,925,000. c. $3,900,000 d. $3,850,000. 18. The fair value of plan assets at December 31, 2018 is a. $3,895,000. b. $3,500,000. c. $3,670,000. d. $3,440,000.

Explanation / Answer

15) (D) Determining the level of individual premiums

16) (A) projected benefit obligation exceeds the fair value of the plan assets.

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