Question
19. The following information is for the pension plan for the employees of Pharoah, Inc. 12/31/20 12/31/21 Accumulated benefit obligation $2,750,000 $3,710,000 Projected benefit obligation
19.
The following information is for the pension plan for the employees of Pharoah, Inc.
| 12/31/20 | 12/31/21 | |||||
| Accumulated benefit obligation | $2,750,000 | $3,710,000 | ||||
| Projected benefit obligation | 3,050,000 | 3,950,000 | ||||
| Fair value of plan assets | 3,080,000 | 3,580,000 | ||||
| AOCI - Net (gain) or loss | (375,000) | (430,000) | ||||
| Settlement rate | 8% | 8% | ||||
| Expected rate of return | 7% | 6% | ||||
Pharoah estimates that the average remaining service life is 15 years. Pharoah's contribution was $480,000 in 2021 and benefits paid were $235,000.
(a)
Calculate the interest cost for 2021.
| Interest cost for 2021 | $ |
(b)
Calculate the actual return on plan on assets for 2021
(c)
Calculate the unexpected gain or loss in 2021
(d)
Calculate the corridor for 2018 and the amorazation of the net gain for 2021
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An Auditors Guide To Auditing Financial Statements In The UK
Authors: Steve Collings
1st Edition
1526527480, 978-1526527486
