Waddle Company amended its defined benefit pension plan on January 1, 2016, to
increase retirement benefits earned with each service year. The actuary estimated the
prior service cost to be $216,000. Waddle’s 80 present employees are expected to retire
at the rate of about 10 each year at the end of each of the next eight years.
Required:
1> Using the service method, calculate the amount of prior service cost to be amortized
to pension expense in 2016.
2> Using the straight-line method, calculate the amount of prior service cost to be
amortized to pension expense in 2016.
Flint Hills, Inc. has prepared a year-end 2016 trial balance. Certain accounts in the trial
balance do not reflect all activities that have occurred.
Required: Prepare adjusting journal entries, as needed, for the following items.
1> The Supplies account shows a balance of $540, but a count of supplies reveals only
$210 on hand.
2> Flint Hills initially records the payments of all insurance premiums as expenses. The
trial balance shows a balance of $420 in Insurance expense. A review of insurance
policies reveals that $125 of insurance is unexpired.
3> Flint Hills employees work Monday through Friday, and salaries of $2,400 per week
are paid each Friday. Flint Hills’ year-end falls on Tuesday.
4> On December 31, 2016, Flint Hills received a utility bill for December electricity
usage of $190 that will be paid in early January.
Listed below are five terms followed by a list of phrases that describe or characterize
each of the terms. Match each phrase with the number for the correct term.
If executive stock options or restricted stock are outstanding when calculating diluted
EPS, what are the components of the “proceeds” assumed available for the repurchase
of shares under the treasury stock method?
How should bond issue costs be accounted for on the books of the issuing corporation?
Wainright Co. began the year with a net pension liability of $112 million (underfunded
pension plan). Pension expense for the year included the following ($ in millions):
service cost, $40; interest cost, $24; expected return on assets, $16; amortization of net
loss, $8; amortization of prior service cost, $12.
Required:
Prepare the appropriate general journal entry to record Wainright’s pension expense.
Listed below are five terms followed by a list of phrases that describe or characterize
each of the terms. Match each phrase with the number for the correct term.
