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In: Accounting
Pension data for Freddie Johns Company include the following for 2020: Settlement rate 8% Expected return...
Pension data for Freddie Johns Company include the following for 2020:
Settlement rate 8%
Expected return on plan assets: 12%
Actual return on plan assets: $170,000
Service cost: $300,000
Est. remaining service life of employees 10 years
As of January 1, 2020:
PBO $1,500,000
Plan assets $1,700,000
AOCI – PSC $200,000
AOCI – Actuarial (G)/L $60,000
During 2020:
Amortization of prior service cost $25,000
Cash contributions to pension fund $240,000
Benefit payments to retirees $260,000
Prepare all journal entries necessary related to this pension for the year. You may use individual journal entries or a combined journal entry, but be sure to clearly support your answer with all necessary calculations and/or T-accounts. Also, you may choose to use the pension worksheet to support your answer, but the pension worksheet is not required.
Solutions
ekkarill92 answered 1 year agoRelated Solutions
Pension data for Sewell Corporation include the following for the current calendar year: Discount rate, 8%...
Pension data for Sewell Corporation include the following for
the current calendar year:
Discount rate, 8%
Expected return on plan assets, 10%
Actual return on plan assets, 12%
PBO, January 1
$620,000,000
Plan assets, January 1
630,000,000
Plan assets, December 31
670,000,000
Benefit payments to retirees, December 31
55,000,000
Required:
Assuming cash contributions were made at the end of the year,
what was the amount of those contributions?
Prepare all pension-related journal entries
5. The risk-free rate of return is 8%, the expected rate of return on the market...
5. The risk-free rate of return is 8%, the expected rate of
return on the market portfolio is 15%, and the stock of Xyong
Corporation has a beta of 1.2. Xyong pays out 40% of its earnings
in dividends, and the latest earnings announced were $10 per share.
Dividends were just paid and are expected to be paid annually. You
expect that Xyong will earn an ROE of 20% per year on all
reinvested earnings forever.
(a) What is the...
Suppose the risk free rate is 4%, the expected rate of return is 8% and the...
Suppose the risk free rate is 4%, the expected rate of return is
8% and the variance of a portfolio is estimated as 500%. What is
the slope of the Capital Allocation Line? Interpret the meaning of
your estimation of the slope. [see p.168 of your text]
Imagine that the expected returns that are associated with an
investment are 0.06, 0.08, 0.094, 0.12 and 0.134. If the standard
deviations that are associated with the returns are 0, 0.022,
0.066, 0.154,...
The One About Pensions Pension data for the Gator Company include the following for the current...
The One About Pensions
Pension data for the Gator Company include the following for the
current calendar year:
Discount rate, 8%
Expected return on plan assets, 10%
Actual return on plan assets, 9%
Service cost, $200,000
January 1:
PBO
$1,400,000
ABO
1,000,000
Plan assets
1,500,000
Amortization of prior service cost
20,000
Amortization of net gain
4,000
December 31:
Cash contributions to pension fund
$220,000
Benefit payments to retirees
240,000
Required:
1) Determine pension expense for the year.
2) Prepare the...
Pension data for Barry Financial Services Inc. include the following: ($ in thousands) Discount rate, 7%...
Pension data for Barry Financial Services Inc. include the
following:
($ in thousands)
Discount rate, 7%
Expected return on plan assets, 10%
Actual return on plan assets, 9%
Service cost, 2021
$
460
January 1, 2021:
Projected benefit obligation
3,050
Accumulated benefit obligation
2,750
Plan assets (fair value)
3,150
Prior service cost—AOCI (2021 amortization, $40)
400
Net gain—AOCI (2021 amortization, $12)
480
There were no changes in actuarial assumptions.
December 31, 2021:
Cash contributions to pension fund, December 31, 2021...
Pension data for Sam Adams Inc. include the following for the current calendar year: Discount rate,...
Pension data for Sam Adams Inc. include the following for the
current calendar year:
Discount rate, 6%
Expected return on plan assets, 8%
Actual return on plan assets, 7%
Service cost, $480,000
January 1:
PBO
$
3,080,000
ABO
2,080,000
Plan assets
3,280,000
Amortization of prior service cost
38,000
Amortization of net gain
7,800
December 31:
Cash contributions to pension fund
$
283,000
Benefit payments to retirees
318,000
Required:
1. Determine pension expense for the year.
2. Prepare the journal entries...
Pension data for Barry Financial Services Inc. include the following: ($ in 000s) Discount rate, 7%...
Pension data for Barry Financial Services Inc. include the
following:
($
in 000s)
Discount rate, 7%
Expected return on plan assets,
9%
Actual return on plan assets,
8%
Service cost, 2018
$
330
January 1, 2018:
Projected benefit
obligation
2,400
Accumulated benefit
obligation
2,100
Plan assets (fair value)
2,500
Prior service cost–AOCI (2018
amortization, $35)
335
Net gain–AOCI (2018
amortization, $6)
350
There were no changes in
actuarial assumptions.
December 31, 2018:
Cash contributions to pension
fund, December 31, 2018...
Pension data for Barry Financial Services Inc. include the following: ($ in thousands) Discount rate, 7%...
Pension data for Barry Financial Services Inc. include the
following:
($ in thousands)
Discount rate, 7%
Expected return on plan assets, 9%
Actual return on plan assets, 8%
Service cost, 2021
$
330
January 1, 2021:
Projected benefit obligation
2,400
Accumulated benefit obligation
2,100
Plan assets (fair value)
2,500
Prior service cost—AOCI (2021 amortization, $35)
335
Net gain—AOCI (2021 amortization, $6)
350
There were no changes in actuarial assumptions.
December 31, 2021:
Cash contributions to pension fund, December 31, 2021...
The expected rate of return on a Treasury Bill is 0.020, the expected rate of return...
The expected rate of return on a Treasury Bill is 0.020, the
expected rate of return on the Bud 5000 is 0.08 and the required
rate of return of a stock is 0.10. What is the stocks beta?
Assume you manage a risky portfolio with an expected rate of return of 8% and a...
Assume you manage a risky portfolio with an expected rate of
return of 8% and a standard deviation of 18%. The T-bill rate is
3%. Suppose your client prefers to invest in your portfolio a
proportion that maximizes the expected return of the overall
portfolio subject to the constraint that the overall portfolio's
standard deviation will note exceed 12%. What is the expected
return of the overall portfolio? convert your answer to percentages
and round to two decimal places
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