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Exhibit 1: Continental Systems GmbH | |
Income statement | |
Year ended December 31 | |
(in thousands) | 2008 |
Sales revenue | €76,000 |
Cost of goods sold | (48,000) |
Administrative expense | (4,000) |
Depreciation expense | (6,000) |
Interest expense | (4,800) |
Tax expense | (5,760) |
Net income | €7,440 |
Balance sheet | ||
As of December 31 | ||
(in thousands) | ||
Assets | 2008 | 2007 |
Cash | €8,800 | €8,000 |
Accounts receivable | 44,000 | 42,000 |
Inventory | 16,800 | 16,000 |
Fixed assets, at cost | 97,200 | 88,000 |
Accumulated depreciation | (42,000) | (36,000) |
Total assets | €124,800 | €118,000 |
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Discount rate | Expected rate of return |
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Select Pension Plan Information for Prime Doors (as of 12/31/05) Projected benefit obligation (PBO) $15,500,000 Accumulated benefit obligation (ABO) $13,750,000 Market value of plan assets $11,875,000
Required disclosure | Not required to be disclosed |
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Change | Result |
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(Figures in millions) | |
PBO | $435 |
Service Cost | 39 |
ABO | 370 |
Actual Return on Plan Assets | 39 |
Benefits Paid | 22 |
Unamortized Past Service Cost | 39 |
FMV of Plan Assets | 295 |
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2006 | 2007 | |
PBO | $21 million | $23 million |
Discount Rate | 6.0% | 7.5% |
Rate of Compensation Increase | 4.0% | 4.0% |
Actual | Smoothed |
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Fair value of plan assets at the beginning of the year
+ Actual return on assets
+ Employer contributions
− Benefits paid
= Fair value of plan assets at the end of the year
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Based on the information above, which of the following statements is most accurate?
Contributions $3.0 million Reported pension expense $2.8 million Economic pension expense $3.1 million
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Beginning Projected Benefit Obligation (PBO) | $65,000,000 |
Ending PBO | 90,000,000 |
Service Cost | 27,000,000 |
Interest Cost | 3,000,000 |
Benefits Paid | 5,000,000 |
Actual Return on Plan Assets | 7,500,000 |
Expected Return on Plan Assets | 8,500,000 |
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Statement #1: | The grant date of a service-based award is the date when the employees’ benefits are fully vested. |
Statement #2: | When two or more performance conditions must be satisfied, the requisite service period ends when the first condition is met. |
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Pension Benefit Obligation (PBO) | $85,475,000 |
Accumulated Benefit Obligation (ABO) | 65,250,000 |
Fair value of plan assets | 71,365,000 |
Net pension liability | 5,450,000 |
Discount rate | 6.25% |
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Net pension liability | Other comprehensive income |
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For the valuation of the CEO’s stock options granted on January 1, 2006, Gasline estimated a fair value of $100,000 by using Monte Carlo simulation. In accordance with SFAS No. 123(R), which of the following statements is most accurate? Gasline's accounting treatment of the options is:CEO Options (grant date January 1, 2006)
Strike price
$37.00
Current market price
$35.00
Number of options
100,000
Option period
4 years
Vesting period
25% per year
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