ACC 302 ACC302 Unit 5 Exam with Answers (Kaplan University)

ACC 302 ACC302 Unit 5 Exam with Answers (Kaplan University)

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ACC 302 Unit 5 Exam (Kaplan)

  1. Presented below is pension information for Green Company for the year 2015: Expected return on plan assets                                                       $24,000
    Interest on vested benefits                                                                15,000
    Service cost                                                                                     50,000
    Interest on projected benefit obligation                                                21,000
    Amortization of prior service cost due to increase in benefits                 18,000

    The amount of pension expense to be reported for 2015 is
  2.  
    The interest on the projected benefit obligation component of pension expense
  3.  
    Ohlman, Inc. maintains a defined-benefit pension plan for its employees. As of December 31, 2015, the market value of the plan assets is less than the accumulated benefit obligation. The projected benefit obligation exceeds the accumulated benefit obligation. In its balance sheet as of December 31, 2015, Ohlman should report a liability in the amount of the
  4.  
    Presented below is pension information related to Woods, Inc. for the year 2015:

    Service cost                                                                                 $82,000
    Interest on projected benefit obligation                                             54,000
    Interest on vested benefits                                                              24,000
    Amortization of prior service cost due to increase in benefits             12,000
    Expected return on plan assets                                                      18,000

    The amount of pension expense to be reported for 2015 is
  5.  
    Which of the following statements is true about postretirement health care benefits?
  6.  
    When a company adopts a pension plan, prior service costs should be charged to
  7.  
    The computation of pension expense includes all the following except
  8.  
    A corporation has a defined-benefit plan. A pension liability will result at the end of the year if the
  9.  
    The following information relates to Jackson, Inc.:

                                                                                 For the Year Ended December 31,
                                                                                        2014                           2015      
    Plan assets (at fair value)                                     $1,360,000                  $1,824,000
    Pension expense                                                       570,000                       450,000
    Projected benefit obligation                                     1,620,000                    1,934,000
    Annual contribution to plan                                         600,000                       450,000
    Accumulated OCI (PSC)                                            480,000                       420,000

    The amount reported as the liability for pensions on the December 31, 2015 balance sheet is
  10.  
    Presented below is information related to Noble Inc. as of December 31, 2015.

    Accumulated OCI (G/L)                                                                $     90,000
    Projected benefit obligation                                                              3,650,000
    Accumulated benefit obligation                                                         3,420,000
    Vested benefits                                                                                 1,620,000
    Plan assets (at fair value)                                                                 3,354,000
    Accumulated OCI (PSC)                                                                         -0-

    The amount reported as the pension liability on Noble's balance sheet at December 31, 2015 is as follows:
  11.  
    Foster Corporation received the following report from its actuary at the end of the year:

                                                                              December 31, 2014    December 31, 2015
          Projected benefit obligation                                   $2,000,000                  $2,200,000
          Accumulated benefit obligation                               1,300,000                    1,480,000
          Fair value of pension plan assets                           1,380,000                    1,440,000
                
                The amount reported as the pension liability at December 31, 2014 is
  12.  
    In a defined-contribution plan, a formula is used that
  13.  
    The following data are for the pension plan for the employees of Leonard Company.

                                                                         1/1/13                12/31/13            12/31/14   
    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%

    Leonard’s contribution was $420,000 in 2014 and benefits paid were $375,000. Leonard 
    estimates that the average remaining service life is 15 years. 

    Assume that the actual return on plan assets in 2014 was $265,000. The unexpected gain on plan assets in 2014 was
  14.  
    Prior service cost is amortized on a
  15.  
    The following information is related to the pension plan of Long, Inc. for 2015.

    Actual return on plan assets                                                      $200,000
    Amortization of net gain                                                                82,500
    Amortization of prior service cost due to increase in benefits           150,000
    Expected return on plan assets                                                    230,000
    Interest on projected benefit obligation                                           362,500
    Service cost                                                                                850,000

    Pension expense for 2015 is
  16.  
    The following information for Cooper Enterprises is given below:
     
    Assets and obligations                                                               December 31, 2015
    Plan assets (at fair value)                                                                    $400,000
    Accumulated benefit obligation                                                              740,000
    Projected benefit obligation                                                                   800,000
    Other Items
    Pension asset / liability, January 1, 2015                                                 20,000
    Contributions                                                                                        240,000
    Accumulated other comprehensive loss                                                   335,800


    There were no actuarial gains or losses at January 1, 2015. The average remaining service life of employees is 10 years.

    What is the pension expense that Cooper Enterprises should report for 2015?
  17.  
    In a defined-benefit plan, a formula is used that
  18.  
    When a company amends a pension plan, for accounting purposes, prior service costs should be
  19.  
    The following information relates to the pension plan for the employees of Turner Co.:

                                                                            1/1/14                12/31/14             12/31/15  
    Accum. benefit obligation                             $6,160,000         $6,440,000         $8,400,000 
    Projected benefit obligation                            6,510,000           6,972,000           9,338,000
    Fair value of plan assets                                5,950,000           7,280,000           8,036,000
    AOCI – net (gain) or loss                                      -0-               (1,008,000)         (1,120,000)
    Settlement rate (for year)                                                               11%                    11%
    Expected rate of return (for year)                                                     8%                      7%

    Turner estimates that the average remaining service life is 16 years. Turner's contribution was $882,000 in 2015 and benefits paid were $658,000.

    The amount of AOCI (net gain) amortized in 2015 is
  20.  
    Rossi Company has a defined-benefit plan. At the end of 2015, it has determined the following information related to its pension plan:

    Projected benefit obligation                                                        $730,000
    Accumulated benefit obligation                                                    660,000
    Fair value of pension plan assets                                                610,000

    The amount of pension liability that is reported in Rossi's balance sheet at the end of 2015 is
  21.  
    Which of the following disclosures of pension plan information wouldnot normally be required?
  22.  
    The actual return on plan assets
  23.  
    The following data are for the pension plan for the employees of Leonard Company.

                                                                         1/1/13                12/31/13            12/31/14   
    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%

    Leonard’s contribution was $420,000 in 2014 and benefits paid were $375,000. Leonard 
    estimates that the average remaining service life is 15 years. 

    The corridor for 2014 was $300,000. The amount of AOCI-net loss amortized in 2014 was
  24.  
    A pension fund gain or loss that is caused by a plant closing should be
  25.  
    Alternative methods exist for the measurement of the pension obligation (liability). Which measure requires the use of future salaries in its computation?

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