15. Louie Company has a defined benefit pension plan. On December 31 (the end of the fiscal year), the company received the PBO report from the actuary. The following information was included in the report: ending PBO, S114,000; benefits paid to retirees, $15,000; interest cost, $7,500. The discount rate applied by the actuary was 10%. What was the service cost for the year? a. $91,500. b. $46,500. c. $7,500. d. $22,500. 16. The following information relates to Hatami Company's defined benefit pension plan during the current reporting year: $660,000,000 56,000,000 46,000,000 96,000,000 Plan assets at fair value, January 1 Expected return on plan assets Actual return on plan assets Contributions to the pension fund (end of year) Amortization of net loss Pension benefits paid (end of year) Pension expense 38,000,000 66,000,000 Determine the balance of pension plan assets at fair value on December 31. a. $774 millions. b. $698 millions. c. $764 millions. d. $708 millions. 17. An accounting change that is reported by the prospective approach is reflected in the financial statements of: a. Prior years only. b. Prior years plus the current year. c. The current year only. d. Current and future years. 13. The following information relates to Franklin Freightways for its first year of operations (data in millions of dollars): Pretax accounting income: Pretax accounting income included: Overweight fines (not deductible for tax purposes) Depreciation expense Depreciation in the tax return using MACRS: 200 70 110 The applicable tax rate is 40%. There are no other temporary or permanent differences. Franklin's taxable income ($ in millions) is: a. $40. b. $165. c. S110, d. $160. 14. The tax effect of a net operating loss (NOL) usually: a. NOL carryback results in a current receivable at the end of the NOL year and NOL carryforward creates deferred tax liability. b. Is reflected as deferred tax asset at the end of the NOL year. c. Is reflected as a deferred tax liability at the end of the NOL year. d. NOL carryback results in a current receivable at the end of the NOL year and NOL carryforward creates deferred tax asset. %24