Stanley-Morgan Industries adopted a defined benefit pension plan on April 12, 20

Question

Stanley-Morgan Industries adopted a defined benefit pension plan on April 12, 2016. The provisions of the plan were not made retroactive to prior years. A local bank, engaged as trustee for the plan assets, expects plan assets to earn a 10% rate of return. A consulting firm, engaged as actuary, recommends 5% as the Required: Calculate each of the following amounts as of both December 31, 2016, and December 31, 2017: (Enter your answers in thousands fi.e., 200,000 should be entered as 200).) December 31, 2016 December 31, 2017 2. Plan assets 4. Net pension asset or net pension liability

Explanation / Answer

Project benfit obligation 31st December2016 31st December2017 Opening Balance 0 320000 Service Cost 320000 400000 Interest cost@5% 16000 Benfits Paid 0 0 320000 736000 Plan Asset Balance january 2016 0 330000 Actual return on plan Asset 0 33000 Contribution 2016 330000 340000 330000 703000 Pension Expenses service cost 320000 400000 interest cost 0 16000 return on asset 0 33000 320000 383000

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