Hava Corporation's defined benefit pension plan
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The following information reconciles the funded status of Hava Corporation's defined benefit pension plan with the amount reported in its balance sheet for the prepaid (accrued) pension:
($ in 000s) 2006 2006
Beginning balances Ending balances
Projected benefit obligation ($6,000) ($6,504)
Plan assets 5,760 6,336
Funded status ($240) ($168)
Unamortized prior service cost 600 552
Unamortized net loss 720 672
Prepaid (accrued) pension cost $ 1,080 $ 1,056
At the end of 2006, Hava contributed $696 thousand to the pension fund and benefit payments of $624 thousand were made to retirees. The expected rate of return on plan assets was 10%, and the actuary's discount rate is 8%. There were no changes in actuarial estimates and assumptions regarding the PBO.
14.What is Hava's 2006 actual return on plan assets?
A)$504 thousand
B)$618 thousand
C)$1,128 thousand
D)None of the above is correct.
15.What is Hava's 2006 gain or loss on plan assets?
A)$115.2 thousand
B)$160.8 thousand
C)$276 thousand
D)None of the above is correct.
16.What is the 2006 service cost for Hava's plan?
A)$276 thousand
B)$528 thousand
C)$648 thousand
D)Cannot be determined from the given information.
17.What is the 2006 pension expense for Hava's plan?
A)$594 thousand
B)$606 thousand
C)$678 thousand
D)None of the above is correct.
18.Assume the actuary estimates the net cost of providing health care benefits to a particular employee during his retirement years to have a present value of $60,000. If the benefits relate to an estimated 25 years of service and five of those years have been completed,
A) The EPBO would be $12,000.
B) The EPBO would be $8,400.
C) The APBO would be $8,400.
D) The APBO would be $12,000.
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