Student Name: Instructor Class: McGraw-Hill/Irwin Problem 17-6 STANLEY-MORGAN INDUSTRIES Calculations ($ in 000s) 1.

Projected Benefit Obligation Balance, January 1, 2011 Service cost Interest cost Benefits paid Balance, December 31, 2011 Service cost Interest cost Benefits paid Balance, December 31, 2012 2. Plan Assets Balance, January 1, 2011 Actual return on plan assets Contributions 2011 Benefits paid Balance, December 31, 2011 Actual return on plan assets Contributions 2012 Benefits paid Balance, December 31, 2012 3. Pension Expense - 2011 Service cost Interest cost Expected return on the plan assets Pension expense Pension Expense - 2012 Service cost Interest cost Expected return on the plan assets Pension expense 4. Net Pension Asset/Liability PBO Plan assets Net pension asset, Dec. 31, 2011 PBO Plan assets Net pension liability, Dec. 31, 2012

150 150 200 9 359

- Correct!

- Correct!

160 160 16 170 346

- Correct!

- Correct!

$ $

150 150 200 9 (16) 193

- Correct!

- Correct!

$ $ $ $

150 160 10 359 346 13

- Correct!

- Correct!

Given Data P17-06: STANLEY-MORGAN INDUSTRIES Expected plan asset earnings Recommended discount rate Service cost, 2011 Service cost, 2012 Year-end funding, 2011 Year-end funding, 2012 10% rate of return 6% 150,000 200,000 160,000 170,000

$ $ $ $

Student Name: Instructor Class: McGraw-Hill/Irwin Problem 17-12 KOLLAR COMPANY Pension Expenses ($ in millions) Requirement 1: Service cost Interest on PBO* Expected return** Amortization of prior service costs Amortization of net gain*** Pension expense *PBO Balance, 1-1-2011 Prior service cost Balance, 1-2-2011 Interest 10% Service cost Payments Balance, 12-31-2011 Interest 10% Service cost Payments Balance, 12-31-2012 **Plan Assets Balance, 1-1-2011 2011 contribution 2011 actual return Payments Balance, 12-31-2011 2012 contribution 2012 actual return Payments Balance, 12-31-2012 ***Net Gain-AOCI 2011 Net gain-AOCI at 1-1-2011 10% of $1,800 Excess at the beginning of the year Average remaining service period in years Amount amortized to 2011 pension expense 2012 Net gain-AOCI at 1-1-2011 Loss in 2011 Amortization in 2011 Net gain-AOCI at 1-1-2012 10% of $2,540 No excess at the beginning of the year No amortization for 2012 $ 2011 520.0 $ 220.0 (192.0) 40.0 (5.0) 583.0 $
Correct!

2012 570.0 256.0 (232.8) 40.0 none 633.2

Correct!

$ $

1,800 400 2,200 220 520 (380) 2,560 256 570 (450) 2,936
Correct!

1,600 540 180 (380) 1,940 590 210 (450) 2,290

Correct!

$ $ $ $

230 (180) 50 10 5 230 (12) (5) 213 (256) none

Requirement 2: KOLLAR COMPANY General Journal ($ in millions) Account 2011 Pension expense Plan assets Amortization of net gain-OCI PBO Amortization of prior service cost 2012 Pension expense Plan assets PBO Amortization of prior service cost Debit 583 192 5 740 40
- Correct!

Credit

633.2 232.8 826.0 40.0

- Correct!

Requirement 3: KOLLAR COMPANY General Journal ($ in millions) Account 2011 Loss-OCI Plan assets Prior service cost-OCI PBO 2012 Loss-OCI Plan assets Debit 12 12 400 400
- Correct! - Correct!

Credit

22.8 22.8
- Correct!

Requirement 4: KOLLAR COMPANY General Journal ($ in millions) Account 2011 Plan assets Cash 2012 Plan assets Cash Debit 540 540
- Correct!

Credit

590 590
- Correct!

2011 PBO

380

Plant Assets 2012 PBO Plant assets

380

- Correct!

450 450
- Correct!

Given Data P17-12: KOLLAR COMPANY ($ in millions) Projected benefit obligation, 12/31/2010 Prior service cost, 1/2/2011 Service cost, 2011 Service cost, 2012 Discount rate Payments to retirees, 2011 Payments to retirees, 2012 Net gain-AOCI on 1/1/2011 Years gains and losses amortized Plan asset balance, 1/1/2011 2011 contribution 2012 contribution Expected rate of return 2011 actual return 2012 actual return $ $ $ $ $ $ $ $ $ $ $ $ 1,800 400 520 570 10% 380 450 230 10 1,600 540 590 12% 180 210

Student Name: Instructor Class: McGraw-Hill/Irwin Problem 17-14 HILTON PANELING, INC. ($ in 000s) Requirement 1: Actual return on plan assets Plan assets Beginning of 2011 Actual return Cash contributions Less: Retiree benefits End of 2011 Requirement 2: Loss or gain on plan assets Expected return Actual return Loss on plan assets Requirement 3: Service cost PBO: Beginning of 2011 Service cost Interest cost Loss (gain) on PBO Less: Retiree benefits End of 2011 Requirement 4: Pension expense Service cost Interest cost Actual return Plus: loss Amortization of: prior service cost-AOCI net gain-AOCI Pension expense $ $ (216) (24) 310 161 (240) 25 (6) 250

2,400 216 245 (270) 2,591

<--Correct!

$ $

240 (216) 24

<--Correct!

2,300 310 161 (270) 2,501

<--Correct!

<--Correct!

Requirement 5: Average remaining service life of active employees Net gain, Jan. 1 10% of $2,400 Excess Amount amortized Average service period (in years) $ $ 330 240 90 6 15

<--Correct!

Given Data P17-14: HILTON PANELING, INC. Reconciliation Schedules ($ in 000s) 2011 Beginning Balances $ 2,300 2,400 100 325 330 2011 Ending Balances $ 2,501 2,591 90 300 300 $ $ 270,000 245,000 10% 7%

Projected benefit obligation Plan assets Funded status Prior service cost-AOCI Net gain-AOCI Paid to pensioners in 2011 Employer contribution in 2011 Expected rate of return Actuary's discount rate

Student Name: Instructor Class: McGraw-Hill/Irwin Problem 17-15 METRO RECREATION Pension Spreadsheet

($ in 000s) Jan. 1, 2011 Service cost Interest cost, 7% Expected return Loss on assets Amortization of: Prior service cost Net loss Gain on PBO Cash funding Retiree benefit Dec. 31, 2011

PBO (4,100) (332) (287)

Plan Assets 4,530

AOCI Prior Service Cost 840

Net Loss 477

Pension Expense 332 287 (453) 53

Cash

453 (53) (70) 44 295 (4,380)

Correct!

(2) (44) 340 (295) 4,975

Correct!

70 2 (340)

770
Correct!

484
Correct!

238
Correct!

O RECREATION on Spreadsheet

Net Pension Liability/ Asset 430 (332) (287) 453 (53) 44 340 595
Correct!

Given Data P17-15: METRO RECREATION ($ in 000s) Pension related data: Projected benefit obligation Accumulated benefits obligation Plan assets (fair value) Interest (discount) rate Expected return on plan assets Prior service cost-AOCI Net loss-AOCI Average remaining service life, years Gain due to changes in actuarial assumptions Contributions to pension fund (end of year) Pension benefits paid (end of year) $ Jan. 1 4,100 3,715 4,530 $ Dec. 31 4,380 3,950 4,975

7% 10% 840 477 12 44 340 295