In: Accounting
Ms. Brown apparently wasn't up on pension accounting because the plan file contains only the following note: Remember to tell boss that I need help with accounting for these things! -C.B.
It takes a couple of days to assemble the information you need, but you finally get it all together and summarize it as follows:
Pension Plan
2014 |
2015 |
|
Projected Benefit Obligation |
65,000 |
|
Plan Assets (fair value), January 1 |
41,000 |
|
Pension asset/liability January 1 (credit) |
24,000 |
|
Prior service cost, January 1 |
16,000 |
|
Service cost |
4,000 |
5,900 |
Settlement rate |
10% |
10% |
Expected rate of return |
10% |
10% |
Actual return on plan assets |
3,600 |
6,100 |
Amortization of prior service cost |
7,000 |
5,500 |
Annual contributions |
7,200 |
8,100 |
Benefits paid to retirees |
3,150 |
5,400 |
Increase in pension benefit obligations due to actuarial assumptions |
8,700 |
0 |
Accumulated benefit obligations at December 31 |
72,180 |
78,900 |
Average service life of all employees |
20 years |
|
Vested benefit obligation—December 31 |
46,400 |
Tasks: