Majee Brands's defined benefit pension plan specifies annual retirement benefits equal to 1.6% × service years × final y
Posted: Tue Nov 16, 2021 9:24 am
Majee Brands's defined benefit pension plan specifies annual
retirement benefits equal to 1.6% × service years × final year's
salary, payable at the end of each year. Justin Porch was
hired by Majee at the beginning of 2007 and is expected to
retire at the end of 2041 after 35 years' service. Her retirement
is expected to span 18 years. porch's salary is $90,000 at the end
of 2021 and the company's actuary projects her salary to be
$240,000 at retirement. The actuary's discount rate is 7%. (FV of
$1, PV of $1, FVA of $1, PVA of $1, FVAD of
$1 and PVAD of $1) (Use appropriate
factor(s) from the tables
provided.)
At the beginning of 2022, the pension formula was amended
to:
1.75% × Service years × Final year's salary
The amendment was made retroactive to apply the increased benefits
to prior service years.
Required:
1. What is the company's prior service cost
at the beginning of 2022 with respect to Porch after the
amendment described above?
2. Since the amendment occurred at
the beginning of 2022, amortization of the prior
service cost begins in 2022. What is the prior service cost
amortization that would be included in pension expense?
3. What is the service cost for 2022 with
respect to Porch?
4. What is the interest cost for 2022 with
respect to Porch?
5. Calculate pension expense for 2022 with
respect to Porch, assuming plan assets attributable to her of
$150,000 and a rate of return (actual and expected) of 10%.
(For all requirements, do not round intermediate
calculations. Round your final answers to the nearest whole
dollar.)
Sachs Brands's defined benefit pension plan specifies annual
retirement benefits equal to 1.6% × service years × final year's
salary, payable at the end of each year. Angela Davenport was hired
by Sachs at the beginning of 2007 and is expected to retire at the
end of 2041 after 35 years' service. Her retirement is expected to
span 18 years. Davenport's salary is $90,000 at the end of 2021 and
the company's actuary projects her salary to be $240,000 at
retirement. The actuary's discount rate is 7%. (FV of $1, PV
of $1, FVA of $1, PVA of $1, FVAD of
$1 and PVAD of $1) (Use appropriate
factor(s) from the tables
provided.)
At the beginning of 2022, the pension formula was amended
to:
1.75% × Service years × Final year's salary
The amendment was made retroactive to apply the increased benefits
to prior service years.
Required:
1. What is the company's prior service cost
at the beginning of 2022 with respect to Davenport after the
amendment described above?
2. Since the amendment occurred at
the beginning of 2022, amortization of the prior
service cost begins in 2022. What is the prior service cost
amortization that would be included in pension expense?
3. What is the service cost for 2022 with
respect to Davenport?
4. What is the interest cost for 2022 with
respect to Davenport?
5. Calculate pension expense for 2022 with
respect to Davenport, assuming plan assets attributable to her of
$150,000 and a rate of return (actual and expected) of 10%.
(For all requirements, do not round intermediate
calculations. Round your final answers to the nearest whole
dollar.)
Sachs Brands's defined benefit pension plan specifies annual
retirement benefits equal to 1.6% × service years × final year's
salary, payable at the end of each year. Angela Davenport was hired
by Sachs at the beginning of 2007 and is expected to retire at the
end of 2041 after 35 years' service. Her retirement is expected to
span 18 years. Davenport's salary is $90,000 at the end of 2021 and
the company's actuary projects her salary to be $240,000 at
retirement. The actuary's discount rate is 7%. (FV of $1, PV
of $1, FVA of $1, PVA of $1, FVAD of
$1 and PVAD of $1) (Use appropriate
factor(s) from the tables
provided.)
At the beginning of 2022, the pension formula was amended
to:
1.75% × Service years × Final year's salary
The amendment was made retroactive to apply the increased benefits
to prior service years.
Required:
1. What is the company's prior service cost
at the beginning of 2022 with respect to Davenport after the
amendment described above?
2. Since the amendment occurred at
the beginning of 2022, amortization of the prior
service cost begins in 2022. What is the prior service cost
amortization that would be included in pension expense?
3. What is the service cost for 2022 with
respect to Davenport?
4. What is the interest cost for 2022 with
respect to Davenport?
5. Calculate pension expense for 2022 with
respect to Davenport, assuming plan assets attributable to her of
$150,000 and a rate of return (actual and expected) of 10%.
(For all requirements, do not round intermediate
calculations. Round your final answers to the nearest whole
dollar.)
retirement benefits equal to 1.6% × service years × final year's
salary, payable at the end of each year. Justin Porch was
hired by Majee at the beginning of 2007 and is expected to
retire at the end of 2041 after 35 years' service. Her retirement
is expected to span 18 years. porch's salary is $90,000 at the end
of 2021 and the company's actuary projects her salary to be
$240,000 at retirement. The actuary's discount rate is 7%. (FV of
$1, PV of $1, FVA of $1, PVA of $1, FVAD of
$1 and PVAD of $1) (Use appropriate
factor(s) from the tables
provided.)
At the beginning of 2022, the pension formula was amended
to:
1.75% × Service years × Final year's salary
The amendment was made retroactive to apply the increased benefits
to prior service years.
Required:
1. What is the company's prior service cost
at the beginning of 2022 with respect to Porch after the
amendment described above?
2. Since the amendment occurred at
the beginning of 2022, amortization of the prior
service cost begins in 2022. What is the prior service cost
amortization that would be included in pension expense?
3. What is the service cost for 2022 with
respect to Porch?
4. What is the interest cost for 2022 with
respect to Porch?
5. Calculate pension expense for 2022 with
respect to Porch, assuming plan assets attributable to her of
$150,000 and a rate of return (actual and expected) of 10%.
(For all requirements, do not round intermediate
calculations. Round your final answers to the nearest whole
dollar.)
Sachs Brands's defined benefit pension plan specifies annual
retirement benefits equal to 1.6% × service years × final year's
salary, payable at the end of each year. Angela Davenport was hired
by Sachs at the beginning of 2007 and is expected to retire at the
end of 2041 after 35 years' service. Her retirement is expected to
span 18 years. Davenport's salary is $90,000 at the end of 2021 and
the company's actuary projects her salary to be $240,000 at
retirement. The actuary's discount rate is 7%. (FV of $1, PV
of $1, FVA of $1, PVA of $1, FVAD of
$1 and PVAD of $1) (Use appropriate
factor(s) from the tables
provided.)
At the beginning of 2022, the pension formula was amended
to:
1.75% × Service years × Final year's salary
The amendment was made retroactive to apply the increased benefits
to prior service years.
Required:
1. What is the company's prior service cost
at the beginning of 2022 with respect to Davenport after the
amendment described above?
2. Since the amendment occurred at
the beginning of 2022, amortization of the prior
service cost begins in 2022. What is the prior service cost
amortization that would be included in pension expense?
3. What is the service cost for 2022 with
respect to Davenport?
4. What is the interest cost for 2022 with
respect to Davenport?
5. Calculate pension expense for 2022 with
respect to Davenport, assuming plan assets attributable to her of
$150,000 and a rate of return (actual and expected) of 10%.
(For all requirements, do not round intermediate
calculations. Round your final answers to the nearest whole
dollar.)
Sachs Brands's defined benefit pension plan specifies annual
retirement benefits equal to 1.6% × service years × final year's
salary, payable at the end of each year. Angela Davenport was hired
by Sachs at the beginning of 2007 and is expected to retire at the
end of 2041 after 35 years' service. Her retirement is expected to
span 18 years. Davenport's salary is $90,000 at the end of 2021 and
the company's actuary projects her salary to be $240,000 at
retirement. The actuary's discount rate is 7%. (FV of $1, PV
of $1, FVA of $1, PVA of $1, FVAD of
$1 and PVAD of $1) (Use appropriate
factor(s) from the tables
provided.)
At the beginning of 2022, the pension formula was amended
to:
1.75% × Service years × Final year's salary
The amendment was made retroactive to apply the increased benefits
to prior service years.
Required:
1. What is the company's prior service cost
at the beginning of 2022 with respect to Davenport after the
amendment described above?
2. Since the amendment occurred at
the beginning of 2022, amortization of the prior
service cost begins in 2022. What is the prior service cost
amortization that would be included in pension expense?
3. What is the service cost for 2022 with
respect to Davenport?
4. What is the interest cost for 2022 with
respect to Davenport?
5. Calculate pension expense for 2022 with
respect to Davenport, assuming plan assets attributable to her of
$150,000 and a rate of return (actual and expected) of 10%.
(For all requirements, do not round intermediate
calculations. Round your final answers to the nearest whole
dollar.)