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    ACC141 Diagnostic Test

    Uploaded by

    Vincenzo Cassano
    The document provides financial information about pension and noncurrent liability accounts for two companies. It includes projected benefit obligations, plan assets, service costs, contributions, benefits paid, returns and other pension amounts for 2009 and 2010. It also includes details of notes payable, finance leases, bonds payable, and interest expenses for a company for 2009 and 2010.

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    ACC141 Diagnostic Test

    Uploaded by

    Vincenzo Cassano
    16 views2 pages
    The document provides financial information about pension and noncurrent liability accounts for two companies. It includes projected benefit obligations, plan assets, service costs, contributions, benefits paid, returns and other pension amounts for 2009 and 2010. It also includes details of notes payable, finance leases, bonds payable, and interest expenses for a company for 2009 and 2010.

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    © © All Rights Reserved

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    The document provides financial information about pension and noncurrent liability accounts for two companies. It includes projected benefit obligations, plan assets, service costs, contributions, benefits paid, returns and other pension amounts for 2009 and 2010. It also includes details of notes payable, finance leases, bonds payable, and interest expenses for a company for 2009 and 2010.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    16 views2 pages

    ACC141 Diagnostic Test

    Uploaded by

    Vincenzo Cassano
    The document provides financial information about pension and noncurrent liability accounts for two companies. It includes projected benefit obligations, plan assets, service costs, contributions, benefits paid, returns and other pension amounts for 2009 and 2010. It also includes details of notes payable, finance leases, bonds payable, and interest expenses for a company for 2009 and 2010.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    of 2

    ACC120 ENHANCEMENT to ACC141

    DIAGNOSTIC TEST

    The following information relates to the defined benefit pension plan of the Tiaong
    Company as of January 1,2009:
    Projected benefit obligation (PBO) P16,150,000
    Fair value of plan assets 15,135,000
    Unrecognized prior service cost 1,050,000
    Unrecognized actuarial gain or loss 0

    Pension data for the years 2009 and 2010 follows:


    2009 2010
    Current service cost P 870,000
    P1,150,000
    Contribution to the plan 1,200,000 1,250,000
    Benefits paid to retirees 1,320,000 1,400,000
    Actual return on plan assets 263,500 1,800,000
    Amortization of past service cost 210,000 186,667
    Actuarial change increasing PBO 800,000 -
    Settlement interest rate 11%
    11%
    Long-term expected rate of return on
    Plan assets 10%
    10%
    As of January 1,2010,the remaining expected service life of employee was 5 years.

    QUESTIONS:
    Based on the above result of your audit, answer the following:
    1.What is the 2009 net pension expense?
    a. P2,593,000 c. P1,200,000
    b. P4,370,000 d. P1,343,000

    2.The projected benefit obligation as of December 31,2009 is


    a. P18,276,500 c. P17,476,500
    b. P16,973,000 d. P16,173,000

    3.The prepaid/accrued pension expense on December 31,2009 is


    a. P1,358,000 c. P108,000
    b. P3,153,000 d. P 0

    4.What is the 2010 net pension expense?


    a. P1,863,702 c. P1,547,082
    b. P1,250,000 d. P1,819,232

    5.The prepaid/accrued pension expense on December 31,2010 is


    a. P 0 c. P1,655,082
    b. P3,143,302 d. P 721,702

    The noncurrent liabilities of Pitogo Company at December 31, 2009 included the
    following:
    Note Payable, bank
    P3,600,000
    Liability under finance lease
    2,623,000
    Note payable, supplier
    1,500,000
    Transactions during 2010 and other information relating to Pitogo’s liabilities were as
    follows:
    a) The note payable to the bank bears interest at 20% and is dated May 1,2009.
    The principal amount of P3,600,000 is payable in four equal annual
    installments of P900,000 beginning May 1, 2010. The first principal and
    interest payment was made on May 1, 2010.
    b) The finance lease is for a ten-year period. Equal annual payments of
    P750,000 are due on December 31, of each year. The interest rate implicit in
    the lease is 18%. The amount of P2,623,200 represents the present value of
    the six remaining lease payments (due December 31, 2010 through
    December 31, 2015) discounted at 18%.
    c) The note payable to supplier bears interest at 19% and matures on
    September 30, 2011. On February 25, 2011, after the end of the reporting
    period, but before the 2010 statements were authorized for issue, Pitogo
    Company consummated a noncancelable agreement with a lender to
    refinance the 19%. P1,500,000 on a long term basis, on readily determinable
    terms that have not yet been implemented. Both parties are financially
    capable of honoring the agreement, and there have been no violations of the
    agreement’s provisions.
    d) On April 1, 2010, Pitogo issued for P7,005,675, P6,000,000 face amount of its
    20%, P100,000 bonds. The bonds were issued to yield 15%. The bonds are
    dated April 1, 2010 and mature on April 1, 2015. Interest is payable annually
    on April 1.

    QUESTIONS:
    Based on the above and the result of your audit, determine the following:
    6. Liability under finance lease as of December 31, 2010
    a. P1,873,200 c. P2,017,544
    b. P2,345,376 d. P1,123,200
    7. Carrying amount of bonds payable as of December 31, 2010
    a. P6,893,813 c. P6,856,527
    b. P7,417,536 d. P7,117,536
    8. Total noncurrent liabilities as of December 31, 2010
    a. P12,211,357 c. P10,711,357
    b. P10,154,190 d. P 9,817,014
    9. Current portion of long-term liabilities as of December 31, 2010
    a. P3,150,000 c. P2,727,832
    b. P2,812,824 d. P2,169,864
    10. Total interest expense for the year 2010
    a. P2,145,314 c. P1,673,139
    b. P2,408,028 d. P1,673,139

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