A13. Sachs Brands's defined benefit pension plan specifies annual retirement benefits equal to 1.6% x service years x finalyear's salary, payable at the end of each year. Angela Davenport was hired by Sachs at the beginning of 2007 and isexpected to retire at the end of 2041 after 35 years' service. Her retirement is expected to span 18 years. Davenport'ssalary is $84,000 at the end of 2021 and the company's actuary projects her salary to be $250,000 at retirement. Theactuary's discount rate is 6%. (FV of $1, PV of $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD of $T) (Use appropriatefactor(s) from the tables provided.)Required:2. Estimate by the accumulated benefits approach the amount of Davenport's annual retirement payments earned as ofthe end of 2021.3. What is the company's accumulated benefit obligation at the end of 2021 with respect to Davenport? (Do not roundIntermediate calculations. Round your final answer to the nearest whole dollar)4. If no estimates are changed in the meantime, what will be the accumulated benefit obligation at the end of 2024(three years later), when Davenport's salary is $90,000? (Do not round Intermediate calculations. Round your finalanswer to the nearest whole dollar)2. Annual retirement payments3.Accumulated benefitobligation 2021Accumulated benefitobligation 20244.

2. $140,000 3. $202,611 4. $289,575

Answered: 2. Annual retirement payments…

Business

Accounting

2. Annual retirement payments Accumulated benefit obligation 2021 3. Accumulated benefit obligation 2024

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter19: Accounting For Post Retirement Benefits

Section: Chapter Questions

Problem 1E

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Sachs Brands's defined benefit pension plan specifies annual retirement benefits equal to 1.5% x service years x final year's salary, payable at the end of each year. Angela Davenport was hired by Sachs at the beginning of 2007 and is expected to retire at the end of 2041 after 35 years' service. Her retirement is expected to span 18 years. Davenport's salary is $93,000 at the end of 2021 and the company's actuary projects her salary to be $295,000 at retirement. The actuary's discount rate is 7%. (FV of $1, PV of $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD of $1) (Use appropriate factor(s) from the tables provided.) At the beginning of 2022, the pension formula was amended to: 1.60% x Service years x Final year's salary The amendment was made retroactive to apply the increased benefits to prior service years. Required: 1. What is the company's prior service cost at the beginning of 2022 with respect to Davenport after the amendment described above? 2. Since the amendment occurred at…
Sachs Brands's defined benefit pension plan specifies annual retirement benefits equal to 1.5% x service years x final year's salary, payable at the end of each year. Angela Davenport was hired by Sachs at the beginning of 2007 and is expected to retire at the end of 2041 after 35 years' service. Her retirement is expected to span 18 years. Davenport's salary is $93,000 at the end of 2021 and the company's actuary projects her salary to be $295,000 at retirement. The actuary's discount rate is 7%. (FV of $1, PV of $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD of $1) (Use appropriate factor(s) from the tables provided.) Required: 1. What is the company's projected benefit obligation at the beginning of 2021 (after 14 years' service) with respect to Davenport? (Do not round intermediate calculations. Round your final answer to the nearest whole dollar.) 2. Estimate by the projected benefits approach the portion of Davenport's annual retirement payments attributable to 2021 service. 3.…
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Sachs Brands's defined benefit pension plan specifies annual retirement benefits equal to 1.6% × service years x final year's salary, payable at the end of each year. Angela Davenport was hired by Sachs at the beginning of 2007 and is expected to retire at the end of 2041 after 35 years' service. Her retirement is expected to span 18 years. Davenport's salary is $90,000 at the end of 2021 and the company's actuary projects her salary to be $240,000 at retirement. The actuary's discount rate is 7%. (FV of $1, PV of $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD of $1) (Use appropriate factor(s) from the tables provided.) Required: 1. What is the company's projected benefit obligation at the beginning of 2021 (after 14 years' service) with respect to Davenport? (Do not round intermediate calculations. Round your final answer to the nearest whole dollar.) 2. Estimate by the projected benefits approach the portion of Davenport's annual retirement payments attributable to 2021 service. 3.…
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