Answered step by step
Verified Expert Solution
Question
1 Approved Answer
Lewis Industries adopted a defined benefit pension plan on January 1, 2021. By making the provisions of the plan retroactive to prior years, Lewis incurred
Lewis Industries adopted a defined benefit pension plan on January 1, 2021. By making the provisions of the plan retroactive to prior years, Lewis incurred a prior service cost of $3 million. The prior service cost was funded immediately by a $3 million cash payment to the fund trustee on January 2, 2021. However, the cost is to be amortized (expensed) over 10 years. The service cost-$200,000 for 2021is fully funded at the end of each year. Both the actuary's discount rate and the expected rate of return on plan assets were 8%. The actual rate of return on plan assets was 10%. At December 31, the trustee paid $15,000 to an employee who retired during 2021. Required: Determine each of the following amounts as of December 31, 2021, the fiscal year-end for Lewis: (Enter your answers in whole dollars.) Balance at December 31 1. Projected benefit obligation 2. Plan assets 3. Pension expense
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