Cummings Inc. had the following reconciliation at December 31, 2017: Fair value of plan assets.......................$5,000 PBO...............................................4,200 Funded
Question:
Cummings Inc. had the following reconciliation at December 31, 2017:
Fair value of plan assets.......................$5,000
PBO...............................................4,200
Funded status....................................$ 800
AOCI-prior service cost......................$ 300
AOCI-net actuarial loss.........................700
Total pension AOCI loss.....................$1,000
The following assumptions are being used for the pension plan in 2018:
Discount rate...............................................................5%
Expected rate of return on plan assets..................................8%
Average remaining work life.......................................10 years
Remaining amortization period for prior service costs...........6 years
Additional 2018 Information:
Service cost................................................$442
Cash contributed to the plan (year-end).................250
Pension benefits paid by the plan (year-end)...........465
Actual return on plan assets..............................673
New actuarial loss on the PBO............................64
Required:
1. Compute pension expense for 2018.
2. Compute the fair value of plan assets at December 31, 2018.
3. Compute the PBO at December 31, 2018.
4. Compute AOCI-net actuarial loss as of December 31, 2018.
Step by Step Answer:
Financial Reporting and Analysis
ISBN: 978-1259722653
7th edition
Authors: Lawrence Revsine, Daniel Collins, Bruce Johnson, Fred Mittelstaedt, Leonard Soffer