Analyzing and Interpreting Pension Disclosures Assuma. Fi. Du. Pont ha Nemours and Co.'s 10 - K report has the following diselosures related to its retirement plans (5 millions). HINT: Do not use negative signs with your answers. (a) How much pension expense (revenue) does DuPont report in its 2010 incorte satement? Dupont reports pensior (b) Dupont reports a 51,804 million expected return on persion plan assets as an ottset to 2010 penifion expense. Esomate what the expected return would have been had Dupont not changed the assumption on the expected refurn in 2010 . (Round your dollar ariswers to the nearest whole number.) What is Dupont's actual gain or loss reailzed on its 2010 persion plan abyets? (5 million) (c) What main factors affected Dupont's persion plan assets and persion liabin ity during 2010 : Olrivestment gains and employer contributions increased the plan assets, and benefits paid reduced plan assets. Service and interest costs increased the pension liability, and actuarial gains and bencit payments reduced the Nablity. Olrvestment gains and employer contributions increased the plan assets, and benefis paid reduced plan assets. Service and interest costs decreased the pension liability, and actuarial gains and benefit payments reduced the labli ty. Olnvestment gains and employer contributions increased the plan assets, and benefits pa d reduced plan assets. Service costs increased the pension lability, and actuarial gains and benefit payments reduced the liablity. interest refiects the amount the company paid to its lenders and did not affect the pension obligation directly. olmvestment gains and employer contributions increased the plan assets. Service and interest costs increased the pension liability, and actuarial gains and benefit payments reduced the liability. Benicits were paid directy by the company and did not affect plan assets (d) Which of the following statements best describes what the phrase funded status means? What is the funded status of the 2010 Dupont: pension plans? Offunded status" is the excess or deficiency of the pension obligation over plan assess O'Funded status" reflects the contributions that the company has made to the plan. 0 Funded status" reveals how much cash the plan has O"Funded status" refers to the extent to which the plan assets are imvested in mutual funds. Dupont's pension plan is (e) Dupont increased its discount rate from 5.434 to 5.56% in 2010 . What effectis) does the increase in the discount rate for determining pension obligations and cost have on the company's balance sheet and its income statement? DAn increase in the discount rate increases the PBO and increases pension cost. OAn increase in the discount rate reduces the PBO and decreases pension cost. OAn increase in the discount rate reduces the PBO and has no effect on pension cost. An increase in the discount rate reduces the PBO and increases pension cost, (f) Which of the following statements best describes how DuPont's pension plan affected its 2010 cash flow? The company contributed cash to its pension plan in 2010. This contribution directly affected the company's cash flow. There was no effect on the company's cash flow as all benefit payments are paid from plan assets. The company's cash flow increased by the gains on the plan's investment portfolio and decreased by the benefits paid to plan participants. The company's cash flow increased as the increase in pension assets more than offset the increase in the PBO. (g) Explain how the returns on pension assets affect the amount of cash that Dupont must contribute to fund the pension plan. OAsset returns have no effect on DuPont's cash flow because increases in the PBO provide whatever financing the plan needs. Asset returns have no effect on Dupont's cash flow because they are recognized in the pension plan and not on the company's financial statements. Should pension investments decline as a result of a decline in the financial markets, DuPont might be required to increase its cash contribution to the pension plan. OAsset returns have no effect on Dupont's cash flow because employee contributions make up any shortfall. Please answer all parts of the