1. The following information pertains to A&E Co.’s defined benefit pension plan for the year 2014.

Projected benefit obligation at 1/1/2014 $800,000

Fair value of pension plan assets 1/1/2014 550,000

Unrecognized prior service costs at 1/1/2014 300,000

Service cost 50,000

Amortization of prior service costs 20,000

Actual return on plan assets 40,000

Contributions to the plan 25,000

Benefits paid 15,000

Expected return on plan assets 8%

Interest/discount rate used 5 %

a. Show calculations to compute the pension expense for 2014. b. Show calculations to compute the ending balance of the projected benefit obligation at 12/31/2014. Show calculations to compute the ending balance of the plan assets at 12/31/2014. 8. Which of the following statements is correct? a. Amortization of prior service costs increases pension expense and reduces the balance of

accumulated OCI prior service costs. b. Amortization of prior service costs reduces pension expense and increases the balance of

accumulated OCI prior service costs.. c. Amortization of loss reduces pension expense and increases the balance of

accumulated OCI gains/losses. d. Amortization of loss reduces pension expense and reduces the balance of

accumulated OCI gains/losses. Question 4 Show computations for each of the following, and clearly show your final answer using the answer sheet provided. 1. AP Corporation has provided the following information:

1/1/15 12/31/15 Accumulated benefit obligation $2,800,000 $3,760,000 Projected benefit obligation 3,100,000 4,000,000 Fair value of plan assets 3,130,000 3,630,000 Accumulated other comprehensive income- net gain 425,000 480,000

Assuming the average service life is 15 years, show computations for the amount of accumulated net gain that should be recognized as part of AP’s pension cost in 2015.

2. Presented below is information related to PVP, Inc. pension plan for 2014:

Accumulated benefit obligation (at year-end) $800,000 Service cost 390,000 Funding contribution for 2014 300,000 Settlement rate used in actuarial computation 9% Expected return on plan assets 9% Amortization of PSC 9,000 Amortization of net gain 30,000 Actual return on plan assets 66,000 Projected benefit obligation (at beginning of period) 800,000 Market-related (and fair) value of plan assets (at beginning of period) 700,000 Show computations for (a) the amount of pension expense to be reported for 2014 and (b) amount of

unexpected gain or loss if any (state clearly if it is a gain or a loss). 3. Presented below is the information related to A&O Corporation’s pension plan for 2014:

Projected benefit obligation amount at the beginning of the year 9,000,000

Projected benefit obligation amount at the end of the year 9,100,000

Fair value of plan assets at the beginning of the year 7,000,000

Fair value of plan assets at the end of the year 7,500,000

Expected return on plan assets 9%

Contributions made during the year 700,000

Benefits paid during the year 500,000

Show calculations to determine actual return on plan assets in 2014.