Uses defined benefit pension plan

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Reference no: EM132016289

1. Big Onion Co. uses a defined benefit pension plan. At year-end the pension obligation is $57.8 million and plan assets $46.9 million. This plan is:

a. Committed to expend an additional $104.7 million

b. Overfunded by $10.9 million

c. Underfunded by $10.9 million

d. Bankrupt

2. Other postemployment benefits include:

a. Direct pension payments

b. Taxes payable

c. Benefits to former employees beyond pensions, such as health insurance

d. Bonuses and stock options

3. Generally, the long-term impact of issuing stock options to employees is:

a. Compensation expense recorded when exercised for the full exercise price

b. The cost of stock options is recorded directly to retained earnings

c. Dilution of equity, since compensation expense is usually not recorded

d. Stock options are almost never exercised by employees

Reference no: EM132016289

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