Consolidated Industries is planning to operate for 10 more years and then cease operations. At that time (in 10 years), it expects to have the followingpension benefit obligations:Year11-1516-20Annual Total Payment$3,100,0002,600,0002,100,00021-2526-3031-351,600,0001,100,000The current value of the firm's pension fund is $6.5 million. Assume that all cash flows occur at year-end.a. Consolidated's expected return on pension assets is 6%, and it uses 6% to discount the expected pension benefit payments. What is thepresent value of the firm's pension fund benefits? Do not round intermediate calculations. Round your answer to the nearest dollar.$b. Is the plan underfunded or overfunded? Do not round intermediate calculations. Round your answer to two decimal places.Funding ratio =which means the assets are -Select- than the PV of benefits and the plan is -Select-

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Answered: Consolidated Industries is planning to…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Howard, Inc. established a defined benefit pension plan two years ago. Details related to the pension plan are as follows: Defined benefit, noncontributory plan with immediate full vesting. Benefits paid at the end of each retirement year beginning at age60. Expected11% rate of return on plan assets. December 31, 20X4 December 31, 20X5 Projected benefit obligation $840,000 $1,336,000 Fair & market-related value of plan assets $869,800 1,394,176 Accumulated benefit obligation 700,000 800,000 Additional information: Howard funded $440,000to the plan on December 31, 20X5 Howard's discount is10%. Average remaining service period of active employees is20 years. Service cost for20X5 is $432,000. Howard did not award retroactive benefits when the plan was adopted. Unrecognized prior net gain on January1, 20X5 was $4,150. Benefits paid $20,000 Calculate and record Howard's minimum required net periodic pension cost for 20X5.Debit Credit Cash $250,000 Accounts Receivable $757,800…
Assume that at the beginning of the current year, a company has a net gain-AOCI of $25,600,000. At the same time, assume the PBO and the plan assets are $222,400,000 and $153,500,000, respectively. The average remaining service period for the employees expected to receive benefits is 10 years. What is the amount of amortization to pension expense for the year? $1,968,000. $344,000. $336,000. $689,000.
The projected benefit obligation was $240 million at the beginning of the year. Service cost for the year was $14 million. At the end of the year, pension benefits paid by the trustee were $10 million and there were no pension-related other comprehensive income accounts. The actuary's discount rate was 5%. What was the amount of the projected benefit obligation at year-end? Note: Enter your answer in millions (i.e., 10,000,000 should be entered as 10). End of the year PBO million
the warren groups pension expense is 78 million. the amount includes a 46 million service cost, a 60 million interest cost, a 34 million reduction for the expected return on plan assets, and a 6 million amoritization of a prior service cost. prepare the journal entry to record the pension expense?
Presented below is information related to the pension plan for Colette Inc. for the year 2021. 1. The projected benefit obligation at the beginning of the year is $700,000, and the settlement rate is 6%. 2. The fair value of pension plan assets at the beginning of the year is $650,000, and the expected return is 9%. The actual return on pension plan assets equals $48,000. 3. At the beginning of the year, Colette has Accumulated OCI (loss) of $90,000. Any amortization of unrecognized net loss is recognized on a straight-line basis over the average remaining service-life of the employees, which equals 8 years. 4. At the beginning of the year, Colette has Accumulated OCI (prior service cost) of $128,000. The company amortizes the prior service cost on a straight-line basis over the average remaining service-life of the employees, which equals 8 years. 5. The service cost related to pension expense is $180,000. 6. The contributions made to the pension fund in 2021 were $151,000. 7. The…
Owe The projected benefit obligation was $460 million at the beginning of the year and $493 million at the end of the year. Service cost for the year was $31 million. At the end of the year, there were no pension-related other comprehensive income accounts. The actuary’s discount rate was 5%. What was the amount of the retiree benefits paid by the trustee? Note: Enter your answer in millions (i.e., 10,000,000 should be entered as 10).
The KLM Corporation reported the following information regarding its defined benefits pension plan for 2020: actuarial gain resulting from excess of actual return over expected. ($350,000) 1/1/2022 return Plan assets 1/1/2022 $ 2,570,000 Projected Benefits Liability 1/1/2022 $3,000,000. Average remaining years of service for current employees is 10 years. Required: 1. determine how much amortization of the actuarial gain should be recognized in the calculation of 2022 pension expense. 2. Make the journal entry for this gain amortization.
Information for the Wildhorse Company pension plan in 2026 is as follows: ● Service cost is $87000 Settlement rate is 10%, expected rate of return is 10% Actual return on plan assets is $370000. There are no prior service costs to amortize ● Annual funding contribution is $112000● Benefits paid to retirees during the year are $92000 ● Average service life of all covered employees is 15 years. The projected benefit obligation on January 1, 2026 was $1320000● The value of plan assets on January 1, 2026 was $1120000● The balance in Other Comprehensive Income - Gains/Losses is a $355000 credit on December 31, 2025. What is the unexpected gain or loss for 2026? Select answer from the options below $258000 unexpected gain $258000 unexpected loss $40000 unexpected gain $40000 unexpected loss
The projected benefit obligation was $480 million at the beginning of the year. Service cost for the year was $26 million. At the end of the year, pension benefits paid by the trustee were $22 million and there were no pension-related other comprehensive income accounts. The actuary's discount rate was 5%. What was the amount of the projected benefit obligation at year-end? End of the year PBO C million
For 2020, Carson Majors Inc. had pension expense of $77 million and contributed $55 million to the pension fund. Which of the following is the journal entry that Carson Majors would make to record pension expense and funding? a. Pension Expense 77,000,000 00Pension Asset/Liability 22,000,000 00Cash 55,000,000 b. Pension Expense 77,000,000 Pension Asset/Liability 22,000,000 00Cash 99,000,000 c. Pension Expense 55,000,000 Pension Asset/Liability 22,000,000 00Cash 77,000,000 d. Pension Expense 22,000,000 Pension Asset/Liability 55,000,000 00Cash 77,000,000
#13On January 1, 2020, Shaina company had a projected benefit obligation of 2,500,000 and apension fund with a fair value of 2,300,000. The entity provided the following informationrelated to the pension plan during the current year:Current service cost 300,000Actual return on the pension fund 62,500Benefits paid to retirees 275,000Contribution to the pension fund 262,500Discount rate 9%Expected return on pension fund 10%What is the pension expense for the current year? The answer is 318,000 pls provide the correct solution for this
The PBO was $100 million at the beginning of the year. Service cost for the year was $12 million. At the end of the year, pension benefits paid by the trustee were $8 million and there were no pension-related OCI account. The actuary's discount rate was 5%. What was the amount fo the PBO at the end of the year? (Enter your answer in million, round to the nearest million, without dollar sign, ex. 123 or -123).

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