An employers reporting for a defined benefit pension is a joint effort between two professions:

actuarial science and accountancy. An employer provides demographic and salary information

about the current work force to an actuary who then computes a pension obligation and service

cost in accordance with the provisions of the plan. While the actuary is responsible for the

calculations, it is the accountants responsibility to ensure that the assumptions, methods, and

disclosures comply with generally accepted accounting principles.

Let us get started. Round your answers to nearest thousands

Year

On December Arrieta Incorporated purchases a subsidiary of Sales Unlimited. Sales

has a defined benefit pension plan. The actuary provides you the following information:

numbers

in s

Statement of financial position

Benefit obligation

Fair value of plan assets

Funded status

Expected impact of plan

alignment

The initial amount in s to be recognized on the books of Arrieta for initial recognition of the

funded status of the Sales pension plan is:

Benefit obligation

Fair value of plan assets

Funded status

Page of

Year

On July Arrieta amends the plan to align the benefits with its own plans, retroactive to

the date of employment for the acquired employees. The retroactive benefits result in a prior

service cost. The remaining service lives of those employees average time to retirement is

years.

The actuary presents you with the following information in s as of

Service cost

Interest cost

Expected return on plan assets

Actuarial gain loss

Plan amendment

Actual return on plan assets

Benefits paid

Employer contributions

Discount rate

Expected return

Salary increases

Required:

a Present the change in plan obligation and the change in plan assets for year and determine

the ending funded status.

b Provide ASC references to support the accounting for the prior service cost.

c Find Pension Expense for year determine whether we need to amortize prior service cost,

and determine the amount of any amortization of gains and losses