The San Francisco Sailors has 200 employees who are expected to receive benefits under the company’s defined-benefit pension plan. The total number of service-years of these employees is 2,000.

September 6, 2019/in Questions Uploads /by mary WAMBUGU

The San Francisco Sailors has 200 employees who are expected to receive

benefits under the company’s defined-benefit pension plan. The total number of service-years of these employees is 2,000. The actuary for the company’s pension plan calculated the following net gains and losses:

For the year ended December 31^st: Gain/(Loss)

2014 $640,000

2015 ($554,000)

2016 $990,000

Prior to 2014, there was no unrecognized net gain or loss.

Information about the company’s projected benefit obligation and fair value (market-related) of plan assets follows:

As of January 1, —–> 2014 2015 2016

PBO $2,100,000 $2,340,000 $2,940,000

Fair Value of Plan Assets $1,680,000 $2,460,000 $2,550,000

Based on the above information about San Francisco Sailors, determine the amount of net gain or loss to be amortized by the company as a component of pension expense for the years 2014, 2015, and 2016. The Sailors amortizes net gains or losses using the straight-line method over the average service life of participating employees.

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Panther Company adopted a noncontributory defined benefit pension plan on January 1, 2007. Panther Company uses the benefit/years-of-service method, which results in the following information:

September 6, 2019/in Questions Uploads /by mary WAMBUGU

Panther Company adopted a noncontributory defined benefit pension plan on January 1, 2007. Panther Company uses

the benefit/years-of-service method, which results in the following information: Numbers presented below for the amount funded represent end of the year balances.

2007 2008

Service cost $300,000 $450,000

Amount funded $240,000 $390,000

Discount rate 10% 10%

Expected rate of return 10% 10%

What is the pension expense for the year ended December 31, 2008?

A. $390,000

B. $426,000

C. $456,000

D. $480,000

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During the current year, Mike sells a tract of land for $800,000 that he had received from Ida on March 10, 1995, when the land had a FMV of $310,000.

September 6, 2019/in Questions Uploads /by mary WAMBUGU

During the current year, Mike sells a tract of land for $800,000 that he had received from Ida on March 10, 1995,

when the land had a FMV of $310,000. The taxable gift was $300,000 because the annual exclusion was $10,000 in 1995. Ida purchased the land on April 12, 1980, for $110,000. On the date of the gift, Ida paid a gift tax of $12,000. Mike paid a sales commission to his broker of $16,000 to sell the land. a) What is Mike’s realized gain on the sale? b) How would your answer to part (a) change, if at all, if the FMV of the gift property were $85,000 on the date of the gift?

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The net income for Blue Water Corporation was $140 million for the year ended December 31, 2006. Related information follows:

September 6, 2019/in Questions Uploads /by mary WAMBUGU

The net income for Blue Water Corporation was $140 million for the year ended December 31, 2006. Related

information follows:

Amortization of patent, $1 million.

Cash dividends paid, $14 million.

Decrease in accounts receivable, $9 million

Decrease in salaries payable, $1 million.

Depreciation expense, $20 million.

Increase in long-term notes payable, $13 million.

Sale of preferred stock for cash, $17 million.

Cash flows from operating activities during 2006 should be reported as:

$151 million

169 million

171 million

182 million