retirement seatwork new answer key - with asset ceiling

8/17/2019 Retirement Seatwork New Answer Key - With Asset Ceiling

1/25

Fair Value of Plan Assets xx

Less: Dened Benet Obligation xx

Prepaid/(Accrued) Benet ost xx

urrent ser!ice cost xx

Past ser!ice cost xx

"ains/(Losses) on settle#ent xx

$et %nterest

%nterest on DBO xx

%nterest on FVPA (xx)

plo'ee Benets &xpense

Actual retun on FVPA xx%nterest on FVPA xx

e#easure#ent gain or loss on FVPA xx

Actuarial gains or losses on DBO xx

$et e#easure#ent "ain or Loss xx

plo'ee Benets &xpense xx

$et e#easure#ent "ain or Loss xx

*otal Dened Benet ost xx


2/25

PROBLEM 1 LESMIS COMPANY

SETTLEMENT PRICE

Beginning Accrued Benefit Cost

Fair Value of Plan Assets 6,000,000

Defined Benefit Obligation 6,500,000

Accrued Benefit Cost (500,000)

DefinedBenefit Obligation

Beginning balance, Jan , !05 6,500,000

Current ser"ice cost ,550,000

#nterest cost (6,500,000 $ %&) '55,000

Benefits aid (0,000)

Present "alue of DBO settled (550,000)

Actuarial gain due to derease in PBO (*50,000)

6,65,000

Fair Vale of Plan A!!et!

Beginning balance 6,000,000

Contributions ,'0,000

#nterest inco+e (6,000,000 $ %&) '!0,000

e+easure+ent gain on lan assets *55,000

-ettle+ent rice (600,000)


Dece+ber *, !05 6,*!5,000

Actual eturn

Di"idends and interest earned on lan assets ..0,000Cost of +anaging t/e lan assets (05,000)

%%5,000

ote1

#nterest inco+e '!0,000


Actual return on lan assets %%5,000

Retire"ent E#$en!e


#nterest cost (6,500,000 $ %&) '55,000

#nterest inco+e (6,000,000 $ %&) ('!0,000)

2oss on settle+ent of lan 50,000

,6*5,000

Re"ea!re"ent %gain!&'lo!!e!


e+easure+ent gain on lan assets (*55,000)

(%05,000)

A((red Benefit Co!t

Beginning balance 500,000etire+ent e3ense ,6*5,000

e+easure+ent gains (%05,000)

et e+easure+ent gain


3/25

!0,000

4nding Accrued Benefit Cost

Fair Value of Plan Assets 6,*!5,000


Accrued Benefit Cost (!0,000)

4+loee benefit e3ense 1)*+,)---

e+easure+ent gain %.-,)---&

Fair "alue of lan assets *)+/,)---

Defined benefit obligation *)*1,)---

Accrued benefit cost %/0-)---&


4/25


5/25


6/25

PROBLEM / Ceb Co"$an

ASSET CEILIN2




Preaid Benefit Cost ,000,000

Asset Ceiling %00,000

4ffect of asset ceiling *00,000



Current ser"ice cost %00,000

#nterest cost (5,000,000 $ 0&) 500,000

Past se"ice cost !00,000

Actuarial gain due to derease in PBO (500,000)Dece+ber *, !0' 5,00,000



Contributions ,000,000

#nterest inco+e (6,000,000 $ 0&) 600,000


Dece+ber *, !0' %,00,000

ote1

#nterest inco+e 600,000e+easure+ent gain on lan assets *00,000

Actual return on lan assets 00,000

Retire"ent E#$en!e

Current ser"ice cost %00,000

Past se"ice cost !00,000

#nterest cost (5,000,000 $ 0&) 500,000

#nterest inco+e (6,000,000 $ 0&) (600,000)

#nterest cost on effect of asset ceiling

(*00,000 $0&) *0,000

.*0,000


Actuarial gain due to derease in PBO (500,000)

e+easure+ent gain on lan assets (*00,000)

4ffect of asset ceiling '%0,000

(**0,000)

4ffect of asset ceiling

4nding balance .00,000

Beginning balance *00,000

#ncrease in asset ceiling 500,0002ess1 #nterest cost on effect of asset ceiling (*0,000)

'%0,000



7/25

Pre$aid Benefit Co!t

Beginning balance (%00,000)

etire+ent e3ense .*0,000

e+easure+ent gains (**0,000)

Contributions (,000,000)

(,!00,000)

Re(on

4nding Preaid Benefit Cost

Fair Value of Plan Assets %,00,000


Preaid Benefit Cost !,000,000

Asset Ceiling ,!00,000

4ffect of asset ceiling .00,000

Entry

etire+ent e3ense .*0,000

e+easure+ent gains

Preaid benefit cost

Preaid benefit cost ,000,000

Cas/


8/25


9/25


10/25

PROBLEM + PIP COMPANY


Fair Value of Plan Assets

Defined Benefit Obligation

Accrued Benefit Cost

Add1 7na+orti8ed ast ser"ice cost

2ess1 7nrecogni8ed actuarial gain

Defined Benefit Obligation

Beginning balance

Current ser"ice cost

#nterest cost (%,.50,000 $ %&)

Benefits aid

Actuarial loss due to increase in PBO

Dece+ber *, !0'


Beginning balance

Contributions

#nterest inco+e (5,!50,000 $ %&)

e+easure+ent gain on lan assets

Benefits aid

Dece+ber *, !0'

ote1

#nterest inco+ee+easure+ent gain on lan assets

Actual return on lan assets

Retire"ent E#$en!e

Current ser"ice cost

#nterest cost (%,.50,000 $ %&)

#nterest inco+e (5,!50,000 $ %&)


Actuarial loss due to increase in PBO

e+easure+ent gain on lan assets

A((red Benefit Co!t

Beginning balance

9ransition to PA-

etire+ent e3ense

e+easure+ent losses

Contributions

econ

4nding Accrued Benefit Cost

et e+easure+ent loss


11/25

Pro:ected Benefit Obligation

Accrued Benefit Cost

Entry

Prior ear ad:ust+ent; etained earnings

Accrued benefit cost

etire+ent e3ense

e+easure+ent loss



Cas/

**0,000

500,000


12/25


13/25


14/25

5,!50,000

%,.50,000

(!,600,000)

,%50,000

(,050,000)

(,00,000)

%,.50,000

,*00,000

5',500

(..0,000)

%50,000

,56,500

5,!50,000

,500,000

*6%,500

!%,500

(..0,000)

6,*65,000

*6%,500!%,500

'5,000

,*00,000

5',500

(*6%,500)

,'.!,000

%50,000

(!%,500)

6!!,500

,00,000

%00,000

,'.!,000

6!!,500

(,500,000)

*,!0',500


15/25

,56,500

(*,!0',500)

%00,000

%00,000

,'.!,000

6!!,500

!,0',500

,500,000

,500,000


16/25


17/25


18/25

Fair Value of Plan Assets %,500,000


Preaid Benefit Cost ,500,000

Asset Ceiling ,!00,000

4ffect of asset ceiling *00,000

!0* !0'

Current ser"ice cost ,!50,000 ,*'*,%50

#ncrease (Decrease) in t/e DBO !,000 (6!,500)

#nterest cost 5'0,000

Past ser"ice cost ,00,000

Bitter Co+an=s etire+ent Fund

-tate+ent of Financial Position

!0' !0* Assets

Cas/ and cas/ e>ui"alents !,000,000 ,!50,000

4>uit securities %,50,000 %,500,000

,50,000 .,%50,000

2iabilities

Accounts aable 5,000 !5,000

et ?ort/ ,*5,000 .,%!5,000

,50,000 .,%50,000


-tate+ent of #nco+e

!0' !0*

et interest !%,500 0,%50

Di"idends .!%,500 55',!50

55,000 66',000

43ense .%,500 %5,000

et e"enue .6%,500 5.,000


-tate+ent of et ?ort/

!0' !0*

Beginning balance .,%!5,000 %,500,000

et re"enue .6%,500 5.,000

Additional contributions ,060,000 !,0!0,000

etire+ent a+ents (,5%,500) (,*.',000)

,*5,000 .,%!5,000

B i i A d B fi C !0' !0*


19/25

Fair Value of Plan Assets .,%!5,000 %,500,000

Defined Benefit Obligation 6,6!5,000 6,000,000

Preaid Benefit Cost !,00,000 ,500,000

Asset Ceiling ,500,000 ,!00,000

4ffect of asset ceiling 600,000 *00,000

Defined Benefit ObligationBeginning balance 6,6!5,000 6,000,000

Current ser"ice cost ,*'*,%50 ,!50,000

#nterest cost 56,!50 5'0,000

Past se"ice cost ,00,000

Actuarial gain due to derease in PBO (6!,500) !,000

Present "alue of DBO settle ('00,000)

Benefits aid (,5%,500) (,*.',000)

Dece+ber *, !0' %,6.5,000 6,6!5,000


Beginning balance .,%!5,000 %,500,000Contributions ,060,000 !,0!0,000

#nterest inco+e %.5,!50 6%5,000

e+easure+ent gain on lan assets .!,!50 (.6,000)

-ettle+ent rice (*50,000)

Benefits aid (,5%,500) (,*.',000)

Dece+ber *, !0' .,%.5,000 .,%!5,000

ote1

Actual return on lan assets .6%,500 5.,000

#nterest inco+e (%.5,!50) (6%5,000)

e+easure+ent gain on lan assets .!,!50 (.6,000)

Retire"ent E#$en!e

Current ser"ice cost ,*'*,%50 ,!50,000

Past se"ice cost ,00,000

@ain on settle+ent (50,000)

#nterest cost 56,!50 5'0,000

#nterest inco+e (%.5,!50) (6%5,000)

#nterest cost on effect of asset ceiling 5',000 !%,000

!,!5.,%50 ,'!,000


Actuarial gain due to derease in PBO (6!,500) !,000e+easure+ent gain on lan assets (.!,!50) .6,000

4ffect of asset ceiling (55',000) !%*,000

(6.,%50) 5%.,000

4ffect of asset ceiling

4nding balance ,000,000 ,500,000

Beginning balance ,500,000 ,!00,000

#ncrease in asset ceiling (500,000) *00,000

2ess1 #nterest cost on effect of asset ceiling (5',000) (!%,000)

(55',000) !%*,000

Pre$aid Benefit Co!tBeginning balance (,500,000) (,!00,000)

etire+ent e3ense ! !5. %50 '! 000



20/25

e+easure+ent gains (6.,%50) 5%.,000

Contributions (,060,000) (!,0!0,000)

(,000,000) (,500,000)

Re(on

4nding Preaid Benefit Cost

Fair Value of Plan Assets .,%.5,000 .,%!5,000

Defined Benefit Obligation %,6.5,000 6,6!5,000Preaid Benefit Cost ,00,000 !,00,000

Asset Ceiling ,000,000 ,500,000

4ffect of asset ceiling 00,000 600,000

Descrition Countr of origin Price

4>ui+ent 7-A !50,000

4>ui+ent ! Jaan !,000,000

4>ui+ent * France *60,000

4>ui+ent ' #ndia ,!50,000

Dece+ber *, !0' arc/ , !05

P'6;dollar P'';dollar

P066;en P0%.;en

P';euro P'%;euro

P0%!;ruee P0%6;ruee

aret rice er ilo9i+e "alue of otionDece+ber *, !0' P50 ',000

arc/ , !05 P'5 .,000

Januar Dece+ber *

Fair "alue of lan assets *,!50,000 *,6%5,000

Pro:ected benefit obligation *,%60,000 ',!6,500

Accrued benefit cost (50,000) ('5,500)

Current ser"ice cost *%5,000

Contribution to t/e lan 550,000

Benefit aid !!5,500

Discount rate %&


21/25


22/25

00

(600,000)


23/25

%,500,000

6,000,000,500,000

,!00,000

*00,000

Currenc Con"ersion rate

dollars P'!;dollar

en P0'!;en

euro P5;euro

ruee P0%5;ruee


24/25

9/e folloing data are a"ailable to -no ?/ite Co+an on Januar , !0'1


Pro:ected Benefit Obligation 6,500,000

Accrued Benefit Cost (500,000)

During t/e current ear, t/e folloing transactions are gat/ered1


Past ser"ice cost *00,000

Actual return of lan assets '00,000Contribution to t/e lan ,000,000

Benefits aid 00,000

Actuarial gain due to decrease in PBO *50,000

Discount rate %&

ate of return on lan assets 5&




Past ser"ice cost *00,000#nterest cost (6,500,000 $ %&) '55,000



Dece+ber *, !0' %,505,000



Contributions ,000,000

#nterest inco+e (6,000,000 $ %&) '!0,000

e+easure+ent gain on lan assets (!0,000)


Dece+ber *, !0' 6,500,000 (+,--.,---)

ote1

#nterest inco+e '!0,000

e+easure+ent gain on lan assets (!0,000)

Actual return on lan assets '00,000


25/25

Retire"ent E#$en!e


Past ser"ice cost *00,000

#nterest cost (6,500,000 $ %&) '55,000

#nterest inco+e (6,000,000 $ %&) ('!0,000)

,.*5,000



e+easure+ent gain on lan assets !0,000

(**0,000)

A((red Benefit Co!t

Beginning balance 500,000

etire+ent e3ense ,.*5,000

e+easure+ent gains (**0,000)

Contributions (,000,000)

,005,000


retirement seatwork new answer key - with asset ceiling

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