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torisob [31]
3 years ago
7

Abbott and Abbott has a noncontributory, defined benefit pension plan. At December 31, 2018, Abbott and Abbott received the foll

owing information: Projected Benefit Obligation ($ in millions) Balance, January 1 $ 125 Service cost 22 Interest cost 15 Benefits paid (8 ) Balance, December 31 $ 154 Plan Assets Balance, January 1 $ 75 Actual return on plan assets 10 Contributions 2018 22 Benefits paid (8 ) Balance, December 31 $ 99 The expected long-term rate of return on plan assets was 12%. There was no prior service cost and a negligible net loss–AOCI on January 1, 2018. Required: 1. Determine Abbott and Abbott’s pension expense for 2018. 2. Prepare the journal entries to record Abbott and Abbott’s pension expense, funding, and payment for 2018.
Business
1 answer:
antiseptic1488 [7]3 years ago
4 0

Answer:

The Journal entries are as follows:

1.

Service Cost A/c                           Dr. $22

Interest cost A/c                            Dr. $15

To Expected return- Plan Assets                $9

To Pension expense                                    $28

(To record the pension expense for 2018)

Workings:

Expected return- Plan Assets = 12% of plan assets

                                                 = 0.12 × $75

                                                  = $9

2.

(i) Pension Expense A/c                                           Dr. $28

Plan Assets (expected return on plan assets) A/c Dr. $9

To PBO (22 service cost + 15 interest cost)                           $37

(To record pension expense)

(ii) Plan assets A/c   Dr. $22

To cash                                  $22

(To record the funding)

(iii) PBO A/c    Dr. $8

To plan assets           $8

(To record PBO or plan assets)

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The following data are available for Springer Corporation.
Alchen [17]

Answer:

B) $330,000

Explanation:

Cash from operating activities involves the cash inflows and outflows that is realised during normal busines s activities. It is the first section that appears in the statement of cash flows.

Other sources of cash flows is from investing activities and financing activities.

Operating cash flow= Net income+ Depreciation- Taxes +/- Change in working capital

Operating cash flow= 300,000+ 60,000- 15,000+ 30,000- 45,000= $330,000

6 0
4 years ago
Explain why a relative price is an opportunity cost. The money price of a pound of bananas is $0. 90 and the money price of a tu
dimaraw [331]

The opportunity cost is stated in relative pricing, that is, the price of one option in comparison to another.

When there are numerous vendors in a market but no one is significant enough to control the price of a product. Because both items must be produced, the relative price must match the opportunity cost. If the opportunity cost of one good is lower in the home country than so will be the relative price.

As bananas cost $0.90 per kg, so, if  a toothpaste is  for $2.25, we are forgoing 2.25 kgs banana (2.25/0.9). Thus, the opportunity cost is 2.5 kg bananas which is equal to the relative price of bananas.

Therefore, relative price is an opportunity cost.

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6 0
2 years ago
As interest rates rise, the prices of existing bonds will? rise stay the same fall either a or b, depending on the state of the
shepuryov [24]

As interest rates rise, the prices of existing bonds will fall.

A fundamental principle of bond investing is that market interest rates and bond prices generally move in opposite directions. When market interest rates rise, prices of fixed-rate bonds fall. this phenomenon is known as interest rate risk.

Interest rates will always change, and no one can predict how they will change over time. Whether interest rates are rising or falling, it’s vital to consider your yield to maturity for any bond purchase and compare it with what you could get if you were to buy a new bond.

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4 0
2 years ago
At December 31, year 3 , Bren Co. had the following deferred income tax items: • A deferred income tax liability of $15,000 rela
ahrayia [7]

Answer:

(B) A noncurrent liability of $4,000

Explanation:

The non-current liability in respect of deferred tax shall be recognised in the accounts of Bren Co. as at December 31 as follows:

Deferred income tax liability related to non-current assets= $15,000

Deferred income tax asset related to non-current liability = ($3,000)

Deferred income tax asset related to current liability         = ($8,000)

Deferred income tax liability to be recorded at year end   = $4,000

So based on the above discussion the answer is (B) A noncurrent liability of $4,000

8 0
4 years ago
Based on its perceived riskiness, the annual required rate of return is 11.5% for shares of Cyberdyne Inc. The company just paid
Ugo [173]

Answer:

the  estimated price of the stock in 5 years, using the Dividend Discount Model is $216.38

Explanation:

The calculation of the estimated price of the stock in 5 years is given below:

= 5th Year dividend ÷ (Required return - Growth Rate)

Dividend at year 5 should be

=Dividend at year 0 × (1 + Growth Rate)^5          

= $8.69 × (1.061)^5 ÷ (0.11.5 - 0.061)

= $216.38

Hence, the  estimated price of the stock in 5 years, using the Dividend Discount Model is $216.38

4 0
3 years ago
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