Activity 4 1 POST Employment Benefits PDF

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Summary

1. These are employee benefits which are payable after completion of employment. *1 pointShort-term employee benefits Post-employment benefits Other long-term employee benefits Te r m i n a t i o n b e n e f i t s2. Which is not a post-employment employee benefit? *1 pointlong-term disability benefi...

Description

1. These are employee benefits which are payable after completion of employment. * 1 point

Short-term employee benefits Post-employment benefits Other long-term employee benefits Termination benefits

2. Which is not a post-employment employee benefit? * 1 point

long-term disability benefits retirement benefits, such as pensions post-employment life insurance post-employment medical care

3. Which statement characterizes defined contribution plan? * 1 point

Defined contribution plans are more complex in construction than defined benefit plans. The employer’s obligation is satisfied by making the appropriate amount of periodic contribution. The investment risk is borne by the employer. Contributions are made in equal amounts by employer and employees

4. Which is incorrect concerning the recognition and measurement of a defined contribution plan? * 1 point

Any unpaid contribution at the end of the period shall be recognized as accrued liability. Any excess contribution shall be recognized as prepaid expense but only to the extent that the prepayment will lead to a reduction in future payments or a cash refund. The contribution shall be recognized as expense in the period it is payable. An entity shall not disclose the amount recognized as expense for a defined contribution plan.

5. Which statement characterizes defined benefit plan? * 1 point

Defined benefit plans are comparatively simple in construction and raise few accounting issues for employers. Retirement benefits are based on the plan’s benefit formula. Retirement benefits depend on how well pension fund assets have been managed. The investment risk is borne by the employee.

6. Which is incorrect concerning the recognition and measurement of a defined benefit plan? * 1 point

The expense recognized for a defined benefit plan is not necessarily the amount of contribution due for the period. Actuarial assumptions are required to measure the obligation and expense and there is a possibility of actuarial gains and losses The defined benefit plan must be fully funded. The obligation is measured on a discounted basis.

7. In a benefit plan, the process of funding refers to * 1 point

determining the defined benefit obligation determining the accumulated benefit obligation determining the amount of pension expense making the periodic contributions to a funding agency to ensure that funds are available to meet claims.

8. These are assets held in an entity, the fund itself, that is legally separate from the reporting entity and exists solely to pay or fund employee benefits. * 1 point

Trust fund Retirement fund Plan assets Pension fund

9. Which is not a component of defined benefit cost? * 1 point

service cost net interest remeasurements contributions to the plan

10. Under a defined benefit plan, which is not a component of service cost? * 1 point

past service cost current service cost gain or loss on plan settlement net interest

11. What is the meaning of “net interest” in relation to a defined benefit cost? * 1 point

Interest expense on defined benefit liability. Interest income on the fair value of plan assets. The difference between interest expense on defined benefit liability and interest income on the fair value of plan assets. Interest expense on defined benefit liability less applicable income tax.

12. Remeasurements of defined benefit plan include * 0 points

the difference between the actual return and interest income on plan assets actuarial gain or loss on projected benefit obligation. change in the effect of asset ceiling minus interest expense on the beginning effect of asset ceiling. all of the above

13 * 3 points

7,250,000 8,200,000 8,850,000 9,800,000 answer not given

14. *

3 points

6,420,000 7,500,000 7,920,000 8,220,000 answer not given

15. CKR Co. has established a defined benefit pension plan for a loan officer. Annual payments under the pension plan are equal to the loan officer’s highest lifetime salary multiplied by 3% multiplied by number of years with the entity. On December 31, 2019, the loan officer had worked for 15 years. The current salary is P500,000. The loan officer is expected to retire in 5 years and the salary increases are expected to average 4% per year during that period. The employee is expected to live for 6 years after retiring and will receive the first annual pension payment one year after retirement. The discount rate is 12%. The relevant present value factors are 4.111 for an ordinary annuity of 1 at 12% fir 6 periods and 0.567 for 1 at 12% for 5 periods. The future value factor of 1 at 4% for 5 periods is 1.217. What is the defined benefit obligation on December 31, 2019? * 3 points

225,000 524,460 608,500 638,269 answer not given

16. What is the amount of current service cost for 2020? * 3 points

55,464 61,019 67,117 84,660 answer not given

17. Using the data in #16, how much is the interest cost for 2020? * 3 points

27,517 35,314 44,392 54,933 answer not given

18. Frederick Electronics, Inc. had the following balances relating to the defined benefit plan on December 31, 2019:Fair value of plan assets 37,000,000Defined benefit plan 33,000,000Asset ceiling 2,500,000What is the prepaid/accrued benefit cost on December 31, 2019? * 3 points

0 1,500,000 2,500,000 4,000,000 answer not given

19 * 3 points

560,000 700,000 840,000 2,520,000 answer not give...