on january 1, 2015, newlin co. has the following balances: projected benefit obl
ID: 2393073 • Letter: O
Question
on january 1, 2015, newlin co. has the following balances:
projected benefit obligation $2,100,000
fair value of plan assets 1,800,000
the settlement rate is 10%. other data related to the pension plan for 2015 are
service cost $180,000
amortization of prior service costs 60,000
contributions 300,000
benefits paid 135,000
actual return on plan assets 237,000
amortization of net gain 18,000
the balance of the projected benefit obligation at december 31, 2015 is A.$2,490,000, B. $2,355,000, C.$2,340,000,D.2,310,000
The fair value of plan assets at December 31, 2015 is
a. $2,337,000
b. $2,100,000
c. $2,202,000
d.$2,065,000
Explanation / Answer
Projected Benefit obligation, Jan 1, 2015 $ 2,100,000 Add: Service Cost 180,000 Add: Interest cost at 10% 210,000 (2100000 x 10%) Less: Benefits paid (135,000) Projected Benefit obligation, Dec 31, 2015 $ 2,355,000 Ans is B Fair Value of plan assets, jan 1, 2015 $ 1,800,000 Add: Actual Return 237,000 Add: Contribution 300,000 Less: Benefits paid (135,000) Fair Value of plan assets, Dec 31, 2015 $ 2,202,000 Ans is C
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