Answered step by step
Verified Expert Solution
Question
1 Approved Answer
Sachs Brands's defined benefit pension plan specifies annual retirement benefits equal to 1.3% * service years x final year's salary. payable at the end
Sachs Brands's defined benefit pension plan specifies annual retirement benefits equal to 1.3% * service years x 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 $91,000 at the end of 2021 and the company's actuary projects her salary to be $285,000 at retirement. The actuary's discount rate is 9% (EV of $1. PV of $1. EVA of $1. PVA of S1. EVAD of S1 and PVAD of s (Use appropriate factor(s) from the tables provided.) At the beginning of 2022, the pension formula was amended to: 1.40% * Service years - 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. Caiculate pension expense for 2022 with respect to Davenport, assuming plan assets attributable to her of S110.000 and a rate of return (actual and expected) of 10%. (For all requirements, do not round Intermediate calculations. Round your final enswers to the nearest whole dollar.) Prior service cost 2. Prior service cost amortization 3. Service cost 4. Interest cost 15. Pension expense Sachs Brands's defined benefit pension plan specifies annual retirement benefits equal to 1.3% * service years x 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 $91,000 at the end of 2021 and the company's actuary projects her salary to be $285,000 at retirement. The actuary's discount rate is 9% (EV of $1. PV of $1. EVA of $1. PVA of S1. EVAD of S1 and PVAD of s (Use appropriate factor(s) from the tables provided.) At the beginning of 2022, the pension formula was amended to: 1.40% * Service years - 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. Caiculate pension expense for 2022 with respect to Davenport, assuming plan assets attributable to her of S110.000 and a rate of return (actual and expected) of 10%. (For all requirements, do not round Intermediate calculations. Round your final enswers to the nearest whole dollar.) Prior service cost 2. Prior service cost amortization 3. Service cost 4. Interest cost 15. Pension expense Sachs Brands's defined benefit pension plan specifies annual retirement benefits equal to 1.3% * service years x 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 $91,000 at the end of 2021 and the company's actuary projects her salary to be $285,000 at retirement. The actuary's discount rate is 9% (EV of $1. PV of $1. EVA of $1. PVA of S1. EVAD of S1 and PVAD of s (Use appropriate factor(s) from the tables provided.) At the beginning of 2022, the pension formula was amended to: 1.40% * Service years - 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. Caiculate pension expense for 2022 with respect to Davenport, assuming plan assets attributable to her of S110.000 and a rate of return (actual and expected) of 10%. (For all requirements, do not round Intermediate calculations. Round your final enswers to the nearest whole dollar.) Prior service cost 2. Prior service cost amortization 3. Service cost 4. Interest cost 15. Pension expense
Step by Step Solution
★★★★★
3.48 Rating (158 Votes )
There are 3 Steps involved in it
Step: 1
An swer 1 Calculation of Projected Benefit Obligation at the beginning of 2021 Pension Expense 13 x ...Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started