1. The Cloak Corporation received the following report from its actuary at the end of the year:
01/01/06 01/31/06
Unrecognized past service cost 500,000 450,000
Accumulated benefit obligation 6,000,000 6,400,000
Fair Value of pension plan assets 5,800,000 6,276,000
Actuarial net gain 800,000 ?
Benefits paid during the year 680,000
Contribution made during the year 520,000
Current service cost 495,000
Expected rate of return 10%
Settlement rate 12%
Ave. working lives of employees 20 years
What is the amount of net benefit expense to be charged against income for the year 2006?
a. 675,000 c. 716,000
b. 685,000 d. 875,000
2. Francisco Company was organized on January 2, 2006 with 300,000 ordinary shares with a P6
