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Pension Expense, Pension Worksheet, Practice Exam Questions

1. Kathy's Kittens, In. provided information post-retirement benefits plan 2013 1. Presented below is pension information related to Woods, Inc. for the year 2013.
Service cost$86,000
Interest on projected benefit obligation$52,000
Interest on vested benefits$28,000
Amortization of prior service cost due to increase in benefits$15,000
Expected return on plan assets$23,000

The amount of pension expense to be reported for 2013 is

$130,000. $115,000.  $181,000. $158,000.

2.Kasper, Inc. sponsors a defined-benefit pension plan. The following data relates to the operation of the plan for the year 2013.
Service cost$260,000
Contributions to the plan $250,000
Actual return on plan assets$240,000
Projected benefit obligation (beginning of year) $2,700,000
Fair value of plan assets (beginning of year)$2,900,000
The expected return on plan assets and the settlement rate were both 9%.
The amount of pension expense reported for 2013 is

$503,000.00. Ã? $260,000.00. $242,000.00. Ã? $263,000.00.

3. pension asset is reported when

the fair value of the pension plan assets is less than the accumulated benefit obligation.
the fair value of the pension plan assets is less than the accumulated benefit obligation and a prior service cost exists.
the accumulated benefit obligation is less than the fair value of the pension plan assets.
the projected benefit obligation is less than the fair value of the pension plan assets.

4. Kathy's Kittens, Inc. has provided the following information for their post-retirement benefits plan for 2013. Service cost $475,000
Discount rate8%
APBO, January 1, 2013$3,800,000
EPBO, January 1, 2013$4,100,000
Average remaining service to full eligibility20 years
Average remaining service to expected retirement  25 years
The amount of post-retirement expense for 2013 is

$931,000.  $969,000.  $779,000.  $803,000.

5. On January 1, 2013, Laura's Living Company has the following defined benefit pension plan balances. Projected benefit obligation $8,800,000 Fair value of plan assets 9,600,000 The interest (settlement) rate applicable to the plan is 10%. On January 1, 2014, the company amends its pension agreement so that service costs of $350,000 are created. Other data related to the pension plan are as follows.

2013 2014
Service costs $145,000 $156,000
Prior service costs amortization $0 $78,000
Contributions (funding) to the plan $180,000 $232,000
Benefits paid $165,000 $203,000
Actual return on plan assets $960,000 $948,000
Expected rate of return on assets 10% 10%

Required: (a) Prepare a pension worksheet for the pension plan for 2013 and 2014. (b) For 2014, prepare the journal entry to record pension-related amounts.

Solution Summary

Your tutorial is attached in excel and gives instructional help to guide you through these requirements.

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