Question
Indigo Company sponsors a defined benefit pension plan. The corporation's actuary provides the following information about the plan. January 1, 2020 December 31, 2020 Vested
Indigo Company sponsors a defined benefit pension plan. The corporation's actuary provides the following information about the plan. January 1, 2020 December 31, 2020 Vested benefit obligation $1,650 $1,750 Accumulated benefit obligation 1,750 2,750 Projected benefit obligation 2,250 2,770 Plan assets (fair value) 1,730 2,640 Settlement rate and expected rate of return 10% Asset/Liability pension 520? Service cost for the year 2020 440 Contributions (financing in 2020) 750 Benefits paid in 202-210
(a) Calculate the actual return on plan assets in 2020.
(b) Calculate the amount of other comprehensive income (G/L) as of December 31, 2020. (Assume that the balance on January 1, 2020 was zero.) (Enter the loss using a negative sign preceding the number, for example -45, or parentheses, for example (45).
(c) Calculate the amount of amortization of net gain or loss for 2020 (corridor's method).
(d) Calculate the pension expense for 2020.
Step by Step Solution
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Step: 1
a The actual return on plan assets in 2020 can be calculated as the difference between the fair value of plan assets at the end of the year and the beginning of the year adjusted for contributions and ...Get Instant Access to Expert-Tailored Solutions
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Step: 2
Step: 3
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