IV. Answer the following questions using the pension information provided for Wild West Communications on page 7. a. Show what would be reported on the following December 31, 2019 financial statements related to Wild West's pensions. Be sure to indicate how each item would be classified. Assume a 21% tax rate. i. Statement of Cash Flow - Direct ii. Statement of Cash Flow - Indirect iii. Statement of Shareowners' Equity b. Explain how service cost should be reported on the income statement c. Explain how Wild West can have both pension assets and pension liabilities on its balance sheet. d. Explain how Wild West can have a current pension liability e. Determine the total gain/loss for 2019. f. How has Wild West chosen to account for gains losses? g. Determine the actual rate of return on plan assets in 2019. h. Determine the expected rate of return on plan assets in 2019. i. Reconcile the balance in the prior service cost account at 12/31/17 to the balance at 12/31/18 and then to the balance at 12/31/19. j. How would Wild West's debt to equity ratio change if all pension amounts were immediately recognized? 2019 2018 $ 19,567 247 Obligations and Funded Status At December 31, Change in Benefit Obligation Beginning of year Service cost Interest cost Plan amendments Actuarial (gain) loss, net Benefits paid Curtailment and termination of benefits Settlements paid End of year 2880 (1248) $21.531 284 680 220 (1.418) (1.475) 181 (456) 19,567 (873) 21248 Change in Plan Assets Beginning of year Actual return on plan assets Company contribution Benefits paid Settlements paid End of year Funded Status end of year 17816 3,385 371 (1 248) (873) 19,451 $(1,797) 19,175 (494) 1.066 (1.475 (456) 17816 $ (1,751) $ 5 Amounts recognized on the balance sheet Noncurrent assets Current liabilities Noncurrent liabilities Total (67) $ 3 (71) (1,683) $ (1,751) (1.735) $ (1.797) Amounts recognized in Accumulated Other Comprehensive Income (Pre-tax) Prior service cost $ 521 $ 586 $ 2022 Net Periodic Benefit Cost Service cost-- cost of services Service cost -- Selling, general and administrative expenses Service cost Amortization of prior service cost Expected return on plan assets Interest cost Loss (gain) Curtailment and termination benefits Other components Total 1 247 61 (1,130) 656 606 $ 230 54 284 8 (1.293) 690 389 181 (5) 219 222 479 S al IV. Answer the following questions using the pension information provided for Wild West Communications on page 7. a. Show what would be reported on the following December 31, 2019 financial statements related to Wild West's pensions. Be sure to indicate how each item would be classified. Assume a 21% tax rate. i. Statement of Cash Flow - Direct ii. Statement of Cash Flow - Indirect iii. Statement of Shareowners' Equity b. Explain how service cost should be reported on the income statement c. Explain how Wild West can have both pension assets and pension liabilities on its balance sheet. d. Explain how Wild West can have a current pension liability e. Determine the total gain/loss for 2019. f. How has Wild West chosen to account for gains losses? g. Determine the actual rate of return on plan assets in 2019. h. Determine the expected rate of return on plan assets in 2019. i. Reconcile the balance in the prior service cost account at 12/31/17 to the balance at 12/31/18 and then to the balance at 12/31/19. j. How would Wild West's debt to equity ratio change if all pension amounts were immediately recognized? 2019 2018 $ 19,567 247 Obligations and Funded Status At December 31, Change in Benefit Obligation Beginning of year Service cost Interest cost Plan amendments Actuarial (gain) loss, net Benefits paid Curtailment and termination of benefits Settlements paid End of year 2880 (1248) $21.531 284 680 220 (1.418) (1.475) 181 (456) 19,567 (873) 21248 Change in Plan Assets Beginning of year Actual return on plan assets Company contribution Benefits paid Settlements paid End of year Funded Status end of year 17816 3,385 371 (1 248) (873) 19,451 $(1,797) 19,175 (494) 1.066 (1.475 (456) 17816 $ (1,751) $ 5 Amounts recognized on the balance sheet Noncurrent assets Current liabilities Noncurrent liabilities Total (67) $ 3 (71) (1,683) $ (1,751) (1.735) $ (1.797) Amounts recognized in Accumulated Other Comprehensive Income (Pre-tax) Prior service cost $ 521 $ 586 $ 2022 Net Periodic Benefit Cost Service cost-- cost of services Service cost -- Selling, general and administrative expenses Service cost Amortization of prior service cost Expected return on plan assets Interest cost Loss (gain) Curtailment and termination benefits Other components Total 1 247 61 (1,130) 656 606 $ 230 54 284 8 (1.293) 690 389 181 (5) 219 222 479 S al
