D. the shortest possible period for funding to maximize the tax dedu
ction.
41) The relationship between the amount funded and the amount repo
rted for pension expense is as follows:
A. pension expense will be more than the amount funded.
B. pension expense will be less than the amount funded.
C. pension expense must equal the amount funded.
D. pension expense may be greater than, equal to, or less than the am
ount funded.
42) The projected benefit obligation is the measure of pension obligati
on that
A. requires the longest possible period for funding to maximize the t
ax deduction.
B. requires pension expense to be determined solely on the basis of t
he plan formula applied to years of service to date and based on existi
ng salary levels.
C. is required to be used for reporting the service cost component of
pension expense.
D. is NOT sanctioned under generally accepted accounting principle
s for reporting the service cost component of pension expense.
43) Yeager Co. maintains a definedbenefit pension plan for its employees. At each balance sheet date, Ye
ager should report a minimum liability at least equal to the
A. unfunded accumulated benefit obligation.
B. projected benefit obligation.
C. accumulated benefit obligation.
D. unfunded projected benefit obligation.
44) On January 1, 2008, Pratt Corp. adopted a definedbenefit pension plan. The plan‟s service cost of $300,000 was fully fu
nded at the end of 2008. Prior service cost was funded by a contributi
on of $120,000 in 2008. Amortization of prior service cost was $48,0
00 for 2008. What is the amount of PrattТs prepaid pension cost at De
cember 31, 2008?
A. $168,000
B. $72,000
C. $120,000
D. $180,000