To convert actual to expected return on plan assets, what's the Worksheet adjustment needed in calculating...

To convert actual to expected return on plan assets, what's the Worksheet adjustment needed in calculating 2019 Pension Expense for Fox Co. based on the following info?

Pension data for the 2019 calendar year:Service cost$ 70,000 Actual return on plan assets 9%

Benefits to retirees 60,000 Expected return on plan assets 7%

Cash contributions 50,000 Settlement rate 6%

Fox's Beginning 2019 Info (December 31, 2018 balances):Plan Assets$ 700,000

Projected Benefit Obligation (PBO) 850,000

Accumulated net other comprehensive loss (average service life is 10 years) 175,000

Prior Service Cost (PSC-Fox uses years of service amortization method) 300,000

(This PSC is attributable to 80 employees who are expected to retire as follows: 10 retire in 2 years, 15 in 3 years, 20 in 4 years, and 35 in 5 years)

17,000 credit

14,000 debit

17,000 debit

14,000 credit

Solutions

Expert Solution

ekkarill92 answered 11 months ago

Next > < Previous

Related Solutions

PBO estimate declined by 40 million Expected return on plan assets = 50 million Actual return...

PBO estimate declined by 40 million Expected return on plan assets = 50 million Actual return on plan assets = 20 million What is the net increase in AOCI? (A net loss was reported AOCI in the previous year's balance sheet)

You are provided the following information: Actual return on plan assets 3% Average tenure of plan...

You are provided the following information: Actual return on plan assets 3% Average tenure of plan participants 20 Benefits paid 308 Contributions 500 Discount rate 4% Expected return on plan assets 5% OCI Gain amortization 2 600 Plan assets 1/1 4,200 Prior service cost 40 Projected benefit obligation 5,600 Service cost 680 Perform the calculation for each of the following: (15) Projected benefit obligation 12/31 (15) Plan assets 12/31 (15) Pension expense (5) The gain or loss to be recognized...

How do we account for Actual Return(s) on Plan Assets? How does the respective return affect...

How do we account for Actual Return(s) on Plan Assets? How does the respective return affect the Pension Liability?

What situation could lead to a bigger difference in the expected return on plan assets vs....

What situation could lead to a bigger difference in the expected return on plan assets vs. the actual return on plan assets - in any given year? a. Young workforce, employees far from retirement b. Assets invested in a blind trust c. IFRS-reporting company

Explain the relationship between risk, the expected rate of return and the actual rate of return.

There are 2 assets. Asset 1: Expected return 7.5%, standard deviation 9% Asset 2: Expected return...

There are 2 assets. Asset 1: Expected return 7.5%, standard deviation 9% Asset 2: Expected return 11%, standard deviation 12%, correlation with asset 1 is 0.4 You hold 30% of your portfolio in asset 1 and 70% in asset 2. a) (1 point) What is the expected return of your portfolio? b) (1 point) What is the covariance between assets 1 and 2? c) (1 point) What is the standard deviation of your portfolio?

The abnormal return of a security derived from CAPM is positive(expected return get from CAPM -actual...

The abnormal return of a security derived from CAPM is positive(expected return get from CAPM -actual return which is given). a. What rational explanation could exist for the abnormal returns？ b. Discuss one behavioural bias that could explain the positive abnormal return? c. Discuss why rational investors may not have arbitraged this apparent profit opportunity?

Discuss why rational investors may not have arbitrage when abnormal return (actual return-expected return obtained from...

Discuss why rational investors may not have arbitrage when abnormal return (actual return-expected return obtained from CAPM) is positive

Expected Return and Standard Deviation / This problem will give you some practice calculating measures of...

Expected Return and Standard Deviation / This problem will give you some practice calculating measures of prospective portfolio performance. There are two assets and three states of the economy State of Economy Probability of State of Economy Rate of Return If State Occurs Stock A Stock B Recession .20 -.15 .20 Normal .50 .20 .30 Boom .30 .60 .40 Expected Returns : Stock A = (.20 * -.15) + (0.50 * .20) + (.30 * .60) = .25 Stock B...

Consider the following two assets: Asset A’s expected return is 15% and return standard deviation is...

Consider the following two assets: Asset A’s expected return is 15% and return standard deviation is 20%. Asset B’s expected return is 10% and return standard deviation is 15%. The correlation between assets A and B is 0.5. (a) w1=0.75, w2=.50, find out expected returns and SD/VARIANCE (b) Instead of a correlation of 0.5 between assets A and B, consider a correlation of - 0.5 and re-compute the above.

Subjects