Question
1.Watson made a very large contribution to Plan B last year, but in the current year the Plan Assets performed much better than expected.The net
1.Watson made a very large contribution to Plan B last year, but in the current year the Plan Assets performed much better than expected.The net result was a large Pension Asset in the current year.The CFO therefore decided to withdraw excess Plan Assets from the fund, and took cash from the Plan and deposited it back into the company.Is it acceptable for the company to withdraw funds from the Plan?If so, what journal entry should Watson have recorded for the transaction?(Provide the Codification reference for your answer)
2.Watson has funded about 25% of each Plan with life insurance policies owned by Watson.They are valued as Plan Assets at the cash surrender value of the policy.According to GAAP, do these policies qualify as Plan Assets?(Provide the Codification reference for your answer)
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