(a) Components of Pension Expense Marin Company sponsors a defined benefit pensi
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Question
(a)
Components of Pension Expense
Marin Company sponsors a defined benefit pension plan for its employees. The following data relate to the operation of the plan for the year 2017 in which no benefits were paid.1. The actuarial present value of future benefits earned by employees for services rendered in 2017 amounted to $55,500. 2. The company’s funding policy requires a contribution to the pension trustee amounting to $144,729 for 2017. 3. As of January 1, 2017, the company had a projected benefit obligation of $908,100, an accumulated benefit obligation of $802,100, and a debit balance of $400,100 in accumulated OCI (PSC). The fair value of pension plan assets amounted to $601,200 at the beginning of the year. The actual and expected return on plan assets was $54,100. The settlement rate was 9%. No gains or losses occurred in 2017 and no benefits were paid. 4. Amortization of prior service cost was $50,500 in 2017. Amortization of net gain or loss was not required in 2017.
Explanation / Answer
Components of pension expense service cost 55500 Interest on Projected Benefit Obligation [Projected benefot obligation *Interest rate][908100*.09] 81729 Expected return on plan asset (54100) Amortization of Prior Service Cost 50500 Pension expense 133629
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