Question

Problem 20-3 (Part Level Submission) Cullumber Company sponsors a defined benefit plan for its 100 employees. On January 1, 2017, the company's actuary provided the following information Accumulated other comprehensive loss (PSC) $152,900 Pension plan assets (fair value and market-related asset value) 196,600 Accumulated benefit obligation 256,600 Projected benefit obligation 380,500 The average remaining service period for the participating employees is 10 years. All employees are expected to receive benefits under the plan on December 31, 2017, the actuary calculated that the present value of Nuture benefits eamed for employee services rendered in the current year amounted to 551.500; the projected benefit obligation was $491,100; far value of pension assets was $273,100; the accumulated benefit obligation amounted to $370,000. The expected return on plan t s and the discount rate on the projected benefit obligation were both 10%. The actual return on plan assets is $10,300. The company's current year's contribution to the pension plan amounted to $66,200. No benefits were paid during the year.

Answer 1

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Solution: Components of Pension Expense Service Cost Interest on Projected benefit obligation (380500*10%) Actual return on Plan assets Unexpected loss (10300) - (196600*10%) Amortization of gain or loss Amortization of prior service cost (152900/10) Pension Expense $ 51,500 $ 38,050 $ -10,300 $ -9,360 $ $ 15,290 85,180