Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

please show solution. refer to the image Winter Company has established a defined benefit pension plan for the employees. Annual payments under the pension plan

please show solution. refer to the image

image text in transcribed
Winter Company has established a defined benefit pension plan for the employees. Annual payments under the pension plan are equal to 3% of an employee's highest lifetime salary multiplied by the number of years with the entity. An employee's salary in 2020 was P500,000. The employee is expected to retire in 20 years and the salary increases are expected to average 4% per year during that period. On December 31, 2020, the employee has worked for 15 years. The employee is expected to live 10 years after retirement and shall receive the first annual pension payment one year after retirement. The discount rate is 12%, Future value of 1 at 4% for 20 periods 2.190 PV of an ordinary annuity of 1 at 12% for 10 periods 5.650 PV of 1 at 12% for 20 periods 0.104 1. What is the annual pension payment that should be used in computing the projected benefit obligation on December 31, 2020? a. 492,750 b. 225,000 C. 235,000 d. 270,000 2. What is the projected benefit obligation on December 31, 2020? a. 132,210 b. 289,540 c. 138,085 d. 158,650

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_2

Step: 3

blur-text-image_3

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

Accounting Chapters 14-26

Authors: Carl Warren

27th Edition

1337272116, 978-1337272117

More Books

Students also viewed these Accounting questions

Question

2. How do I perform this role?

Answered: 1 week ago