Table 3-2 Brunson Corporation Pension Plan Information for Current Fiscal Year B
ID: 2442834 • Letter: T
Question
Table 3-2
Brunson Corporation Pension Plan
Information for Current Fiscal Year
Beginning balance of plan assets at market value $1,560,000
Actual return on plan assets 210,000
Employer's contribution 150,000
Distributions to beneficiaries 75,000
Service cost 125,000
Interest cost 156,000
Changes in benefits and assumptions 35,000
Beginning balance of the PBO 1,580,000
What is the ending balance of plan assets?
a) $1,770,000
b) $1,845,000
c) $1,920,000
d) $1,955,000
15. What is the ending balance of the projected benefit obligation (PBO)?
a) $1,730,000
b) $1,821,000
c) $1,896,000
d) $1,971,000
16. At the beginning of the year, the pension plan is:
a) overfunded by $20,000.
b) overfunded by $35,000.
c) underfunded by $20,000.
d) underfunded by $35,000.
Explanation / Answer
b) $1,845,000 is the correct answer. 1.Ending balance of plan assets Fair value of plan assets at beginning of year $1,560,000 Actual return on plan assets 210,000 Employer's Contribution 150,000 Benefits Paid -75,000 Plan assets at the end of the year $1,845,000 15. d) $1,971,000 is the correct answer. Change in benefit obligation Benefit Obligation at beginning of year $1,580,000 Service Cost 125,000 Interest Cost 156,000 Benefits -75,000 Changes in benefits -35,000 Benefit Obligation at end of year $1,751,000 16.a) Overfunded by $20,000 Projected benefit obligation(Credit) ($1,580,000) Plan assets at fair value (Debit) 1,560,000 Pension asset/liability ($20,000)
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