Chapter 17 Reading Outline References Mailings Review View No Spacing Heading1 H
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Chapter 17 Reading Outline References Mailings Review View No Spacing Heading1 Heading 2 yues uu" "venat is tne tormal name given to tre trustee wno acrmnisers tre pension runo, wnat roe -Candice Lynette has a pension plan in which Eastern makes all contributions and she will receive benefits when she retires based on the balance in the accumulated pension fund. What type of pension plan does Candice Lynette have? Question #11: What is the formula used to calculate 'Defined Benefit Pension Plan? Explain what each variable in this formula means. Question #12. How is PBO reported in an employer's financial statement? How are Plant Assets reported in an employer's financial statement? Is a company's PBO reported in the balance sheet? lts plan assets? Explain. Question #13-What are the components that make up the PBO? Name five events that might change the balance of the PBO. Describe all of them. Question #14 What are the components that make up the Plant Assets? Name three events that night chang 1 the balance of the plan assets. Describe all of them. Question #15-What are the components that make up th. Pension Expense? Describe all of them. Question #16: Read page 100s specificalhr austration 17-6 and 17-6A Aher working through this llustration, complete the following questior: Baby Deal's Ins has a defined benefit pension plan that specifies anqual retinement benefits equal toc 12% service yers Final yer's ulry 4 5Explanation / Answer
Answer(11): Defined benefit pension plan- It is a plan for employees in which employer promises to pay a specified pension amount at the time of retirement. It is calculated by a formula:
(2% of average salary in the last 5 years) * (years as a plan member)
For example; Your salary in last 5 years is 70000 and you participated in the plan for 25 years then
DBP= 2% * 70000 * 25
DBP = $35000
Anser(12): Reporting of PBO in employer's financial statements:
Pension Benefit Obligation is the estimate of pension liability. So it is shown under the liability section of balance sheet but it is not shown in balance sheet somewhere.
Answer(13): Components of PBO- Are as following:
(1): Funded status- Non Current assets status - Non Current liabilities status
(2): Plant assets- These are the assets of funded defined benefit plan.
(3): Pension- Money that is given after the retirement
Answer(14): Components of plan assets:
Answer(15): Components of Pension expenses: Are as following
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