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Alternate Exercises and Problems 17–1
Chapter 17 Pensions and Other Postretirement Benefits
EXERCISES
Exercise 17-1
Requirement 1
($ in millions)
Service cost $60
Requirement 2
Pension expense (calculated above) 72
17–2 Intermediate Accounting, 8/e
Exercise 17-2
Requirement 1
($ in millions)
Pension expense (calculated below) 44*
Plan assets 20
Requirement 2
($ in millions)
PBO ......................................................... 7
Alternate Exercises and Problems 17–3
Exercise 17-3
APBO Service Cost
Exercise 17-4
Requirement 1
($ in millions)
Service cost $61
Requirement 2
($ in millions)
Postretirement benefit expense (calculated above) ........................ 75
17–4 Intermediate Accounting, 8/e
PROBLEMS
Problem 17-1
Requirement 1
measurement date
Requirement 2
Requirement 3
The present value of the retirement annuity as of the retirement date (end of
2046) is:
Requirement 4
1.5% x 17 x $85,000 = $21,675
Alternate Exercises and Problems 17–5
Problem 17-2
Requirement 1
measurement date
Requirement 2
Requirement 3
The present value of the retirement annuity as of the retirement date (end of
2046) is:
Requirement 4
1.5% x 17 x $250,000 = $63,750
17–6 Intermediate Accounting, 8/e
Problem 17-3
Requirement 1
1.5% x 14 x $250,000 = $52,500
Requirement 2
Requirement 3
$3,750 x 10.05909* = $37,722
Requirement 4
Requirement 5
PBO at the beginning of 2016 (end of 2015) $64,835
Alternate Exercises and Problems 17–7
Problem 17-4
Requirement 1
PBO Without Amendment PBO With Amendment
1.5% x 15 yrs x $250,000 = $56,250 1.65% x 15 yrs x $250,000 = $61,875
Requirement 2
Requirement 3
1.65% x 1 x $250,000 = $4,125
Requirement 4
Requirement 5
Service cost (from req. 3) $5,832
17–8 Intermediate Accounting, 8/e
Problem 17-5
PBO With Previous Rate PBO With Revised Rate
1.5% x 15 yrs x $250,000 = $56,250 1.5% x 15 yrs x $250,000 = $56,250
