Question
PLEASE I NEED HELP WITH THAT QUESTION You have the following information related to Chalmers Corporations pension plan: Use the PV of 1, PVAD of
PLEASE I NEED HELP WITH THAT QUESTION
You have the following information related to Chalmers Corporations pension plan: Use the PV of 1, PVAD of 1, and PVOA of 1 tables where appropriate. (Use the appropriate factor(s) from the tables provided.)
Defined benefit, noncontributory pension plan.
Plan initiation, January 1, 20X3 (no credit given for prior service).
Retirement benefits paid at year-end with the first payment one year after retirement.
Assumed discount rate of 7%.
Assumed expected rate of return on plan assets of 9%.
Annual retirement benefit equals years of credited service 0.02 highest salary.
Chalmers made $1,200 contributions to the pension fund at the end of each year.
The actual returns were $0 and $48 in 20X3 and 20X4, respectively.
Information for Frank Bullitt, the firms only employee, follows:
Start date | January 1, 20X0 |
Expected retirement date | December 31, 20Y7 (15 years from plan inception) |
Expected number of payments during retirement | 20 |
Selected actual and expected salary levels:
Date | Salary Level | ||
January 1, 20X0 | $ | 22,000 | |
January 1, 20X3 | 27,000 | ||
January 1, 20X4 | 30,000 | ||
January 1, 20Y7 | 75,000 | ||
Required:
Calculate the service cost and the interest cost components of pension cost for 20X3 and 20X4.
Calculate the PBO at the end of 20X3 and 20X4.
Compute the fair value of plan assets for 20X3 and 20X4.
Prepare the required journal entries for 20X3 and 20X4
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