Explanation of how & why the answer is $175,000 please 2. Logan Corp., a company

Question

Explanation of how & why the answer is $175,000 please

2. Logan Corp., a company whose stock is publicly traded, provides a noncontributory defined-benefit pension plan for its employees. The company's actuary has provided the following information for the year ended December 31, 201:3 Projected benefit obligation Accumulated benefit obligation Fair value of plan assets Service cost Interest on projected benefit obligation Amortization of prior service cost Expected and actual return on plan assets $650,000 525,000 825,000 240,000 24,000 60,000 82,500 The market-related asset value equals the fair value of plan assets. No contributions have been made for 2013 pension cost. In its December 31, 2013 balance sheet, Logan should report a pension asset / liability of a. Pension liability of $650,000 b. Pension asset of $825,000 d. Pension liability of $525,000

Explanation / Answer

Pension assets will calculate by deducting projected benefit obligation from fair value of plant assets

$825,000-$650,000 = $175,000

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