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This is homework exercises in my Intermediate Accounting II class
In chapter 17-18 from the text book : Spicepand, Sepe, Nelson, Thomas: Intermediate Accounting: 8th Edition, McGraw-Hill Irwin
See the file attached .. gonna send pics after you accept my question
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Explanation & Answer
Here you go...........
Judgment Case 17-3
Assume the role of Barlow’s wife. Answer the following questions for your husband.
1. Is Barlow’s observation correct that the company has calculated pension expense on the
basis of amounts not reported in the balance sheet?
Yes, the company has calculated the pension expense on the basis of amounts not reported in the
balance sheet. The company’s balance sheet does not contain the amount of projected benefit
obligation and pension assets. It does not reflect the balance on a “net basis”.
2. What amount would the company report as a pension liability in the balance sheet?
In 2015, the plan asset is underfunded by $30,000
. Hence, the company would report $30,000 as a
pension liability in 2015 balance sheet.
Note: The Company would not report any pension liability in 2016 balance sheet.
3. What amount would the company report as a pension asset in the balance sheet?
In 2016, the plan asset is overfunded by $405,000
. Hence, the company would report $405,000 as
a pension asset in 2016 balance sheet.
Note: The Company would not report any pension asset in 2015 balance sheet.
4. Which of the other amounts reported in the disclosure note would the company report in
the balance sheet?
The company would report the amount of “net gain” and “prior service cost” as components of
“accumulated other comprehensive income” in shareholders’ equity section of the balance sheet.
5. The disclosure note reports a net actuarial gain as well as an actuarial loss. How are
these related? What do the amounts mean?
When the actual return and expected return either on plan assets or PBO turn out to be different,
then gain and losses occur.
The loss in 2016 indicates that the actual return on PBO is higher than the expected return due to
some unspeci...