1. Jones sponsors a defined-benefit pension plan. The following data relates to the operation of the plan for 20XX.

Service Cost $200,000

Contributions to the plan $220,000

Actual return on plan assets $180,000

Projected benefit obligation (beginning of year) $2,400,000

Market-related and fair value of plan assets (beginning of year) $1,600,000

The expected return on plan assets and the settlement rate were both 10%. The amount of pension expense reported for 20XX is

$260,000

$440,000

$280,000

$200,000

None of the above

2. Sellwood Co. has a defined benefit plan. The fair value of the plan assets at the beginning of the year is $30mill. The projected benefit obligation at the beginning of the year is $28mill. The Company had $4mill in unrecognized actuarial losses in Accumulated Other Comprehensive Income as of the beginning of the year. Assume weighted average remaining service life of employees covered under the plan is four years. The pension expense recognized for the fiscal year was $1,200,000. The expected return on plan assets was $500,000. The interest cost on the benefit obligation for the year was $1,100,000. What was the Service Cost component of the pension expense?

$250,000

$300,000

$350,000

$500,000

None of the above

3. Kraft Corporation declares and distributes a cash dividend that is a result of current earnings. How will the receipt of those dividends affect the investment account of the investor under each of the following accounting methods?

Fair Value Method Equity Method

No Effect Decrease

Increase Decrease

No Effect No Effect

Decrease No Effect