Question
The Round Rock Company has provided the following information pertaining to its defined benefit plan: The projected benefit obligation was $2,100,000 on January 1, 2016.
The Round Rock Company has provided the following information pertaining to its defined benefit plan: The projected benefit obligation was $2,100,000 on January 1, 2016. Recognition of prior service cost during 2016 was $150,000.
Service cost for 2016 was $300,000. Plan assets on January 1, 2016 totaled $1,500,000. The expected return on plan assets was 10%. The actual return on plan assets was 8%. The settlement/discount rate was 8%. The December 31, 2016 contribution to the plan asset fund was $450,000. Benefits paid to retirees during 2016 totaled $225,000. The average number of years before retirements is 10 years.
Assume that the average of the remaining employment periods before retirement is 10 years.
Required: 1. Prepare a pension worksheet using the information provided above. (2016)
2. Determine Round Rock's pension expense for 2016.
3. Determine the projected benefit obligation (PBO) as of December 31, 2016.
4. Prepare the journal entry to record pension expense and the funding for the year ended December 31, 2016.
5. Determine the balance of the pension plan assets.
6. What should be reported on the December 31, 2016 balance sheet with respect to the funded status of the defined benefit pension plan?
The professor only provides above infos.
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