Question

A company with a DB pension plan had a beginning PBO of $280,000, beginning Plan Assets of $252,000, and beginning Net Gain -- AOCI of $30,240. The average remaining service period of active employees is 10 years. Additional information for the current year: • Service cost of $37,800, plan contributions of $34,020, retiree benefits paid of $40,824 • Expected return of 8%, Actual return of 6% • Interest rate of 7.5%.

21.		The corridor is ____.
22.		Amortization of the net gain in AOCI is ____.
23.		The gain/loss on plan assets is ____. [Input gain as positive value and loss as negative value.]
24.		The ending balance in Net Gain – AOCI is ____.
25.		Interest cost is ____.
26.		Pension expense is ____.
27.		The ending balance in Plan Assets is ____.
28.		The ending PBO is ____.

Answer 1

21.a hallway or passage connecting parts of a building. a strip of land or airspace along the route of a road or riverthe M1 corridor.

22.Accumulated other comprehensive income (OCI) includes unrealized gains and losses reported in the equity section of the balance sheet that are netted below-retained earnings. Other comprehensive income can consist of gains and losses on certain types of investments, pension plans, and hedging transaction.

23.For an employer, the actuarial gain or loss is calculated based on the actual amount that is paid to an employee compared to previous estimates. If an employer pays less than projected, then it incurs an actuarial gain.

24.Accumulated Other Comprehensive Income (AOCI) is a general ledger account that is listed in the equity section of a company's balance sheet.

25.Interest cost is the amount of interest a borrower pays over the life of the debt. Negative points and rebates should be subtracted from interest costs. Interest costs are only one factor in a loan analysis, other things to consider include opportunity costs, tax benefits, and closing costs, among others.

26.Pension expense is the amount that a business charges to expense in relation to its liabilities for pensions payable to employees. The amount of this expense varies, depending upon whether the underlying pension is a defined benefit plan or a defined contribution plan. ... Defined contribution plan.

27.Plan assets are assets/investments of a funded defined benefit plan, a pension plan in which the employer guarantees a minimum payout and contributes an amount periodically to the plan for the purpose. ... Plan assets are presented on the balance sheet at their fair value at the balance sheet date.

28.Ending fair value of plan assets Ending PBO Thus, benefits paid from the plan decrease the balance of plan assets and decrease the projected benefit obligation. ... An asset gain occurs when the actual return on plan assets is greaterthan the expected return on plan assets.