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serious [3.7K]
2 years ago
11

The projected benefit obligation was $80 million at the beginning of the year. Service cost for the year was $10 million. At the

end of the year, pension benefits paid by the trustee were $6 million and there were no pension-related other comprehensive income (OCI) accounts requiring amortization. The actuary’s discount rate was 5%. The actual return on plan assets was $5 million although it was expected to be only $4 million. What was the total pension expense for the year?
Business
1 answer:
irinina [24]2 years ago
6 0

Answer:

$87 million

Explanation:

The projected benefit obligation (PBO) is a measurement of the present amount of money needed by a company to cover future pension liabilities. PBO uses how long the employee will work and any increased future obligations to the employee's pension.

Given that:

PBO at the beginning of the year = $80 million

Service cost for the year =  $10 million

Interest =  Discount rate × PBO at beginning of the year = 5% × $80 million = 0.05 × $80 million = $4 million

Actuarial (gain) Loss = Amount paid - Expected money = $5 million - $4 million = $1 million

Benefits paid paid by trustees = $6 million

The total pension expense for the year = PBO at year beginning + Service cost + interest - Actuarial (gain) Loss - benefits = $80 million + $10 million + $4 million - $1 million - $6 million = $87 million

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3 years ago
In each of the following situations, indicate whether the 50% reduction for meals applies.
Mashcka [7]

Answer:

Each year, the employer awards its top salesperson an all-expense-paid trip to Jamaica.

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3 years ago
Recall the educational and other requirements for Geographers. What are some requirements that would be helpful to
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8 0
2 years ago
Read 2 more answers
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Answer:

These costs are called overhead cost.

Explanation:

Costs that are incurred as part of the manufacturing process but are not clearly associated with specific units of product or batches of production, including all manufacturing costs other than direct material and direct labor costs, are called overhead cost. These costs can not be associated with specific product so they are allocated to product cost based on estimation.

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3 years ago
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Return on company's stock = 15.6%

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Return on company's stock = 15.6%

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