Posted: April 28th, 2016

Disclosures for a defined benefit pension plan should include which of the following?

5. If a pension plan amendment is adopted and retroactive benefits are granted to employees, the amount of the prior service cost at the date of grant is accounted for
as an intangible asset and liability that are recognized on the plan amendment date
as a prior period adjustment for the total amount of the prior service cost that is reported on the statement of retained earnings
as the total amount of the prior service cost that is recognized as an expense on the current period s income statement
initially as an unamortized amount to be included in the computation of pension expense over future periods

6. In 2011, the Marsha Company closed a manufacturing plant. The resulting actuarial loss should be
recognized over current and future periods using the straight line method
recognized over current and future periods through adjustments to the service cost and prior service cost
included in income for 2011
matched to past results with a prior period adjustment

7. Which of the following items attributable to a defined benefit pension plan would be recognized on a company s balance sheet?

Projected Benefit Pension Plan Prepaid Pension
Obligation Assets Costs
Yes Yes Yes
Yes Yes No
Yes No No
No No Yes

8. Disclosures for a defined benefit pension plan should include which of the following?
I. number of beneficiaries
II. reconciliation of the ending value of the projected benefit obligation
III. reconciliation of the ending fair value of the plan assets
IV. the composition of plan assets
V. the discount rate used
VI. expected long term rate of return on plan assets
I, II, III, IV
I, III, V, VI
II, III, V, VI
III, IV, V, VI

9. In 2010, the Barbara Company initiated a defined benefit pension plan. It recorded $240,000 as pension expense and paid $280,000 to a funding agency. As a result, Barbara will report
pension assets of $280,000 and pension liabilities of $240,000
an accrued liability of $50,000
service cost of $280,000 and unfunded prior service cost of $40,000
prepaid pension cost of $40,000
none of these

10. A company s net periodic pension cost (expense) includes all of the following items except
service cost
employer s contribution to the pension fund
amortization of unrecognized prior service cost
interest cost on the projected benefit obligation