Question
FMC Inc. provides its employees with a defined benefit pension plan, details of which follow: Pension obligation 12/31/20X5 $7,000,000 Plan assets 12/31/20X5 $5,900,000 Discount rate
FMC Inc. provides its employees with a defined benefit pension plan, details of which follow: Pension obligation 12/31/20X5 $7,000,000 Plan assets 12/31/20X5 $5,900,000 Discount rate used in actuarial assumptions 4% Current service cost for the year end of year $590,000 Past service cost (improvement in benefits) 01/01/20X6 $60,000 Actuarial gain due to a change in assumption $0 Actual return on plan assets $275,000 Remitted to pension trustee evenly throughout year $670,000 Payments to retirees evenly throughout year $640,000 What is the net amount that will be charged to pension expense for FMC Inc.'s December 31, 20X6 year end?
a. $623,000
b. $644,600
c. $694,000 - THIS ANSWER COMES BACK INCORRECT
d. $683,000
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started