Actual return and unexpected gain on plan assets
Not what you're looking for?
R25). Use the following information for questions I through III below.
The following data are for the pension plan for the employees of Nickels Company.
....................................................... 1/1/07..... 12/31/07..... 12/31/08
Accumulated benefit obligation $7,500,000 $7,800,000 $10,200,000
Projected benefit obligation........ 8,100,000.. 8,400,000.. 11,100,000
Market-related asset value........ 6,600,000.. 8,700,000.... 9,300,000
Plan assets (at fair value).......... 6,900,000.. 9,000,000.... 9,900,000
Accumulated OCI-Loss................... -0-........ 1,440,000..... 1,500,000
Settlement rate (for year)................................... 10%........... 9%
Expected rate of return (for year)...................... 8%............. 7%
Nickels' contribution was $1,260,000 in 2008 and benefits paid were $1,125,000. Nickels estimates that the average remaining service life is 15 years.
I. The actual return on plan assets in 2008 was
a. $900,000.
b. $765,000.
c. $600,000.
d. $465,000.
II. The actual return on plan assets in 2008 was $765,000. The unexpected gain on plan assets in 2008 was
a. $156,000.
b. $135,000.
c. $114,000.
d. $72,000.
III. The corridor for 2008 was $870,000. The amount of Accumulated OCI-Loss amortized in 2008 under the corridor method was
a. $100,000.
b. $96,000.
c. $42,000.
d. $38,000.
Purchase this Solution
Solution Summary
The solution explains how to calculate actual return and unexpected gain on plan assets
Solution Preview
1. Actual return on plan assets is
Change in plan assets (9,900,000-9,000,000) 900,000
Less: ...
Purchase this Solution
Free BrainMass Quizzes
Employee Orientation
Test your knowledge of employee orientation with this fun and informative quiz. This quiz is meant for beginner and advanced students as well as professionals already working in the HR field.
Lean your Process
This quiz will help you understand the basic concepts of Lean.
Organizational Leadership Quiz
This quiz prepares a person to do well when it comes to studying organizational leadership in their studies.
Cost Concepts: Analyzing Costs in Managerial Accounting
This quiz gives students the opportunity to assess their knowledge of cost concepts used in managerial accounting such as opportunity costs, marginal costs, relevant costs and the benefits and relationships that derive from them.
Business Processes
This quiz is intended to help business students better understand business processes, including those related to manufacturing and marketing. The questions focus on terms used to describe business processes and marketing activities.