ACC 302 ACC302 Unit 4 Seminar with Answers (Kaplan University)
ACC 302 Unit 4 Seminar (Kaplan)
The following data are for the pension plan for the employees of Lockett Company.
1/1/14 12/31/14 12/31/15
Accumulated benefit obligation $2,500,000 $2,600,000 $3,400,000
Projected benefit obligation 2,700,000 2,800,000 3,700,000
Plan assets (at fair value) 2,300,000 3,000,000 3,300,000
AOCL – net loss -0- 480,000 500,000
Settlement rate (for year) 10% 9%
Expected rate of return (for year) 8% 7%
Lockett’s contribution was $420,000 in 2015 and benefits paid were $375,000. Lockett
estimates that the average remaining service life is 15 years.
The actual return on plan assets in 2015 was
The relationship between the amount funded and the amount reported for pension expense is as follows:
In a defined-benefit plan, the process of funding refers to
Hubbard, Inc. received the following information from its pension plan trustee concerning the operation of the company's defined-benefit pension plan for the year ended December 31, 2015.
Projected benefit obligation $11,400,000 $11,760,000
Pension assets (at fair value) 6,000,000 6,900,000
Accumulated benefit obligation 2,400,000 2,760,000
Net (gains) and losses -0- 240,000
The service cost component of pension expense for 2015 is $890,000 and the amortization of prior service cost due to an increase in benefits is $180,000. The settlement rate is 10% and the expected rate of return is 8%. What is the amount of pension expense for 2015?
Which of the following is not a characteristic of a defined-contribution pension plan?