12" F E 25 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 Rhino Robots Inc. has the following information related to its defined benefit pension plan: Fair value of plan assets, beginning of year Fair value of plan assets, ending of year $2,130,000 2,525,000 3,850,000 Projected benefit obligation, beginning of year 3,500,000 Unrecognized net losses 420,000 The average remaining service period of Rhino's employees is 20 years. What is the net loss amortization that Rhino will include in its net periodic pension cost under U.S. GAAP? Projected benefit obligation, end of year T C @ 2 33 33 34 35 36 37 38 38 49 50 40 41 42 43 44 45 46 47 4 13" For a finance lease, the amount recorded initially by the lessee as a liability should normally O Exceed the total of the minimum lease payments. Exceed the present value of the minimum lease payments at the beginning of the lease. O Equal the total of the minimum lease payments. Equal the present value of the minimum lease payments at the beginning of the lease. #3 $ % 4 5 hp 66 & 7 0 8 00 36 37 38 39 40 41 22 23 24 25 44 45 46 47 48 49 50 14"> On January 1, Year 1, Day Corp. entered into a 10-year lease agreement with Ward, Inc. for industrial equipment Annual lease payments of $10,000 are payable at the end of each year. Day knows that the lessor expects a 10% return on the lease. Day has a 12% incremental borrowing rate. The equipment is expected to have an estimated useful life of 10 years, in addition, a third party has guaranteed to pay Ward a residual value of $5,000 at the end of the lease. The present value of an ordinary annuity of $1 at 12% for 10 years is 5.6502 10% for 10 years is 6.1446 The present value of $1 at: 12% for 10 years is 0.3220 42 49 50 15" Carter Components is computing the components of its net periodic pension cost for the current year ended December 31. Canter has calculated that its service cost is $60,000 and has computed interest cost as $42,000. The average remaining service life of its employees is 8 years. The return on $500,000 in plan assets was anticipated to be 8 percent but was actually 8.5 percent. The pension benefit obligation at the beginning of the year was $560,000 and, at the end of the year, 5602,000. The company has an unrecognized gain of $60,000. To what extent will the unrecognized gain reduce current-year net periodic pension cost under U.S. GAAP? O $25 26 27 28 29 30 31 32 16" 10 17 18 19 20 21 22 23 24 25 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 Under U.S. GAAP, interest cost included in the net periodic pension cost recognized for by an employer sponsoring a defined benefit pension plan represents the: O Shortage between the expected and actual returns on plan assets. Increase in the projected benefit obligation due to the passage of time. Increase in the fair value of plan assets due to the passage of time. O Amortization of the discount on unrecognized prior service costs