Question

In: Accounting

Determine the funded status of the plan assets. Determine the pension cost/expense.

PROBLEM 3: Projected benefit obligation (PBO), January 1                                   $180,000

Fair Value of Plan Assets (equals market-related value), January 1                       200,000

Service cost                                                                                                                22,000

Unamortized prior service cost, January 1                                                               20,000

Unrecognized net loss, January 1                                                                              26,000

Loss due to change in actuarial assumptions                                                           15,000

Contributions to pension plan                                                                                  7,500

Benefits paid                                                                                                              13,000

Discount rate                                                                                                             9%

Actual rate of return on plan assets                                                                         10%

Expected rate of return on plan assets                                                                     8%

Average remaining service years                                                                              20

REQUIRED:

  1. Determine the funded status of the plan assets (3 points).
  2. Determine the pension cost/expense (6 points).
  3. Determine the Ending PBO (7 points).
  4. Determine the ending Plan Assets (5 points).
  5. Now what is the funded status (3 points). This is not the same as question a
  6. How much of UNRECOGNIZED Prior Service Cost is reported in Accumulated other comprehensive Income (3 points).

Solutions

Expert Solution

Balance Sheet(Partial)
For the year ended December,
Liabilities
Pension Liability $                  5,700
Stakeholder's Equity
Accumulated Other Comprehensive Income (PSC) $                19,000
Accumulated Other Comprehensive Income (G/L) $                36,700

Funding Status is under-funded by $5700

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ekkarill92 answered 2 years ago
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