Question
On January 1, 2020, Sunland Company has the following defined benefit pension plan balances. Projected benefit obligation $4,438,000 Fair value of plan assets 4,250,000 The
On January 1, 2020, Sunland Company has the following defined benefit pension plan balances.
| Projected benefit obligation | $4,438,000 | |
| Fair value of plan assets | 4,250,000 |
The interest (settlement) rate applicable to the plan is 10%. On January 1, 2021, the company amends its pension agreement so that prior service costs of $501,000 are created. Other data related to the pension plan are as follows.
| 2020 | 2021 | |||||
|---|---|---|---|---|---|---|
| Service cost | $149,000 | $183,000 | ||||
| Prior service cost amortization | 0 | 89,000 | ||||
| Contributions (funding) to the plan | 239,000 | 287,000 | ||||
| Benefits paid | 199,000 | 282,000 | ||||
| Actual return on plan assets | 255,000 | 260,000 | ||||
| Expected rate of return on assets | 6 | % | 8 | % | ||
Prepare a pension worksheet for the pension plan for 2020 and 2021.
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Analysing Financial Statements For Non-Specialists
Authors: Jim OHare
2nd Edition
1138641529, 9781138641525
