Exam 17-19

Question 1

What does pension expense consist of?

Answer 1

Service Cost
Interest on PBO
-Expected Return on Plan assets
Amortization of prior service cost
-Amortization of Net gain

Question 2

What does PBO consist of?

Answer 2

Balance + Interest + service cost - payments

Question 3

What does plan assets consist of?

Answer 3

Balance + contribution + actual return - payments to the plan assets

Question 4

Journal Entry for deferred tax liability

Answer 4

Income Expense (what is to be paid for GAAP)
Deferred Tax libiiliay
Income tax payable

Question 5

record Pension expense entry

Answer 5

Pension expense
Plan assets
net gain- AOCI
   PBO
   Prior service cost

Question 6

Where do amortization amounts for plan assets get reported?

Answer 6

Other comprehensive income

Question 7

Record a loss on plan assets

Answer 7

Loss–OCI

Plan assets

Question 8

Record prior service costs–OCI

Answer 8

Prior service costs-OCI

PBO

Question 9

Statement of shareholder’s equity

Answer 9

Shareholders’ Equity
Retirement Treasury stock
Paid-in capital:
Common stock 1,650,000 2,000,000
Paid-in capital—Excess of par 13,370,000 16,000,000
Paid-in capital—Share repurchase 130,000 0
Retained earnings:
Retained earnings 138,480,000 138,830,000
Less: Treasury stock 0 (3,200,000)
Total shareholders’ equity $153,630,000 $153,630,000

Question 10

Payment of retirees from plan assets

Answer 10

PBO
Plan Assets
(reducing the liability and the Plan assets)