Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

mework 0 Help Save & Exit Submi Check my work Sachs Brands's defined benefit pension plan specifies annual retirement benefits equal to 1.5% x service

image text in transcribed
mework 0 Help Save & Exit Submi Check my work Sachs Brands's defined benefit pension plan specifies annual retirement benefits equal to 1.5% x service years * final year's salary. payable at the end of each year. Angela Davenport was hired by Sachs at the beginning of 2007 and is expected to retire at the end of 2041 after 35 years' service. Her retirement is expected to span 18 years. Davenport's salary is $93.000 at the end of 2021 and the company's actuary projects her salary to be $295,000 at retirement. The actuary's discount rate is 7%. (FV of $1. PV of $1. FVA of $1. PVA of $1. FVAD of $1 and PVAD of $1) (Use appropriate factor(s) from the tables provided.) At the beginning of 2022, the pension formula was amended to: 1.60% Service years x Final year's salary The amendment was made retroactive to apply the increased benefits to prior service years. Required: 1. What is the company's prior service cost at the beginning of 2022 with respect to Davenport after the amendment described above? 2. Since the amendment occurred at the beginning of 2022. amortization of the prior service cost begins in 2022. What is the prior service cost amortization that would be included in pension expense? 3. What is the service cost for 2022 with respect to Davenport? 4. What is the interest cost for 2022 with respect to Davenport? 5. Calculate pension expense for 2022 with respect to Davenport, assuming plan assets attributable to her of $210,000 and a rate of return (actual and expected) of 10% (For all requirements, do not round intermediate calculations. Round your final answers to the nearest whole dollar.) 1. Prior service cost 2. Prior service cost amortization 3. Service cost 4. Interest cost 5. Pension expense IN LI Prev 23 of 24 Next

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Hotel Operations Simulation And Auditing Manual

Authors: Gail E. Sammons, Cihan Cobanoglu

1st Edition

0131704613, 978-0131704619

More Books

Students also viewed these Accounting questions

Question

5. Recognize your ability to repair and let go of painful conflict

Answered: 1 week ago