Brompton Ltd

question 84

Multiple Choice

Brompton Ltd.is evaluating amendments to its pensions plans.Plan 1 covers its salaried employees and Plan 2 provides benefits to its hourly workers.On January 1, 2012, Brompton will grant employees in Plan 2 additional pension benefits of €318,000 based on their past service.Employees in this plan have an average period to vesting of 6 years.Plan 1 will be amended to reduce benefits by €160,000 (in exchange, employees will receive increased contributions to the company's defined contribution plan) .Employees in this plan have an average period to vesting of 5 years.What is the total unrecognized past service cost amortization for 2012?

• A)€43,455
• B)€85,000
• C)€36,933
• D)€21,000

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Definitions:

Price Level

A measure that reflects the average prices of goods and services in an economy at a given time.

Nominal GDP

The market value of all final goods and services produced in a country in a given period, measured in current prices.

GDP Deflator

An index measuring the change in prices of all new, domestically produced goods and services in an economy.

Real Output

The total value of all goods and services produced in an economy, adjusted for inflation, reflecting the actual productivity rather than nominal figures.