Question
Cullumber Corp. sponsors a defined-benefit pension plan for its employees. On January 1, 2021, the following balances related to this plan. Plan assets (fair value)
Cullumber Corp. sponsors a defined-benefit pension plan for its employees. On January 1, 2021, the following balances related to this plan.
| Plan assets (fair value) | $580,000 | ||
| Projected benefit obligation | 630,000 | ||
| Pension asset/liability | 50,000 | Cr. | |
| Prior service cost | 78,000 | ||
| OCI - Loss | 68,000 |
As a result of the operation of the plan during 2021, the actuary provided the following additional data at December 31, 2021.
| Service cost for 2021 | $73,000 | ||
| Actual return on plan assets in 2021 | 47,460 | ||
| Amortization of prior service cost | 17,400 | ||
| Contributions in 2021 | 118,000 | ||
| Benefits paid retirees in 2021 | 83,000 | ||
| Settlement rate | 7 | % | |
| Expected return rate | 8 | % | |
| Average remaining service life of active employees 10 years | |||
(a)
Compute pension expense for Cullumber Corp. for the year 2021 by preparing a pension worksheet.
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Intermediate Accounting
Authors: Loren A. Nikolai, John D. Bazley, Jefferson P. Jones
11th edition
978-0538467087, 9781111781262, 538467088, 1111781265, 978-0324659139
