Chapter 20, Accounting for Pensions and Postretirement Benefits Video Solutions, Intermediate Accounting

03:34

Problem 1

What is a private pension plan? How does a contributory pension plan differ from a noncontributory plan?

Ethan Renner

Numerade Educator

01:08

Problem 2

Differentiate between a defined-contribution pension plan and a defined-benefit pension plan. Explain how the employer's obligation differs between the two types of plans.

Charles Carter

Numerade Educator

01:35

Problem 3

Differentiate between "accounting for the employer" and "accounting for the pension fund."

Ameer Said

Numerade Educator

01:01

Problem 4

The meaning of the term "fund" depends on the context in which it is used. Explain its meaning when used as a noun. Explain its meaning when it is used as a verb.

Amrita Bhasin

Numerade Educator

03:34

Problem 5

What is the role of an actuary relative to pension plans? What are actuarial assumptions?

Ethan Renner

Numerade Educator

03:34

Problem 6

What factors must be considered by the actuary in measuring the amount of pension benefits under a defined benefit plan?

Ethan Renner

Numerade Educator

Problem 7

Name three approaches to measuring benefit obligations from a pension plan and explain how they differ

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01:35

Explain how cash-basis accounting for pension plans differs from accrual-basis accounting for pension plans. Why is cash-basis accounting generally considered unacceptable for pension plan accounting?

Ameer Said

Numerade Educator

02:41

Problem 9

Identify the five components that comprise pension expense. Briefly explain the nature of each component

Ameer Said

Numerade Educator

00:12

Problem 10

What is service cost, and what is the basis of its measurement?

Ali Soave

Numerade Educator

01:34

Problem 11

In computing the interest component of pension expense, what interest rates may be used?

Gregory Higby

Numerade Educator

02:42

Problem 12

Explain the difference between service cost and prior service cost.

Jennifer Stoner

Numerade Educator

01:37

Problem 13

What is meant by "prior service cost"? When is prior service cost recognized as pension expense?

Ameer Said

Numerade Educator

00:37

Problem 14

What are "liability gains and losses," and how are they accounted for?

Luke P

Numerade Educator

01:29

Problem 15

If pension expense recognized in a period exceeds the current amount funded by the employer, what kind of account arises, and how should it be reported in the financial statements? If the reverse occurs- -that is, current
funding by the employer exceeds the amount recognized as pension expense-what kind of account arises, and how should it be reported?

James Kiss

Numerade Educator

08:05

Problem 16

Given the items and amounts shown on page $1094,$ compute the actual return on plan assets: fair value of plan assets at the beginning of the period $\$ 9,500,000 ;$ benefits paid during the period $\$ 1,400,000 ;$ contributions made during the period $\$ 1,000,000 ;$ and fair value of the plan assets at the end of the period $\$ 10,150,000.$

Md.Daniyal Arshad

Numerade Educator

12:18

Problem 17

How does an "asset gain or loss" develop in pension accounting? How does a "liability gain or loss" develop in pension accounting?

Puneet Prajapati

Numerade Educator

01:39

Problem 18

What is the meaning of "corridor amortization"?

Charles Carter

Numerade Educator

05:53

Problem 19

At the end of the current period, Agler Inc. had a projected benefit obligation of $\$ 400,000$ and pension plan assets (at fair value) of $\$ 350,000 .$ What are the accounts and amounts that will be reported on the company's balance sheet as pension assets or pension liabilities?

Puneet Prajapati

Numerade Educator

06:38

Problem 20

At the end of the current year, Pociek Co. has prior service cost of $\$ 9,150,000$. Where should the prior service cost be reported on the balance sheet?

Puneet Prajapati

Numerade Educator

00:43

Problem 21

Describe the accounting for actuarial gains and losses.

Christopher Stanley

Numerade Educator

08:05

Problem 22

Boey Company reported net income of $\$ 25,000$ in 2011 . It had the following amounts related to its pension plan in 2011: Actuarial liability gain $\$ 10,000 ;$ Unexpected asset loss $\$ 14,000 ;$ Accumulated other comprehensive income (G/L) (beginning balance), zero. Determine for 2011
(a) Boey's other comprehensive income, and (b) comprehensive income.

Md.Daniyal Arshad

Numerade Educator

01:29

Problem 23

Describe the reporting of pension plans for a company with multiple plans, some of which are underfunded and some of which are overfunded.

James Kiss

Numerade Educator

01:30

Problem 24

Determine the meaning of the following terms.
(a) Contributory plan.
(b) Vested benefits.
(c) Retroactive benefits.
(d) Years-of-service method.

Kaylee Mcclellan

Numerade Educator

00:27

Problem 25

A headline in the Wall Street Journal stated, "Firms Increasingly Tap Their Pension Funds to Use Excess Assets." What is the accounting issue related to the use of these "excess assets" by companies?

Erwin Antoni

Numerade Educator

02:00

Problem 26

Where can authoritative iGAAP related to the accounting for pensions be found?

Oluwadamilola Ameobi

Numerade Educator

01:35

Problem 27

Briefly describe some of the similarities and differences between U.S. GAAP and iGAAP with respect to the accounting for pensions.

Ameer Said

Numerade Educator

01:57

Problem 28

Cadbury Company, which uses iGAAP, has a postretirement benefit plan. During 2010 Cadbury recognized $\$ 30,000$ unexpected asset gains in income. Just $\$ 10,000$ of the gains exceeded the corridor, and the average remaining service lives of Cadbury's employees is 10 years. Discuss how Cadbury's accounting for the unexpected losses would affect comparisons to a U.S. GAAP company with a similar unexpected gain.