Erickson Company sponsors a defined benefit pension plan. The corporation’s actu

Question

Erickson Company sponsors a defined benefit pension plan. The corporation’s actuary provides the following information about the plan.

(a) Compute the actual return on the plan assets in 2014.

(b) Compute the amount of the other comprehensive income (G/L) as of December 31, 2014. (Assume the January 1, 2014, balance was zero.) (Enter negative amounts using either a negative sign preceding the number e.g. -45 or parentheses e.g. (45).)

(c) Compute the amount of net gain or loss amortization for 2014 (corridor approach).

(d) Compute pension expense for 2014.

January 1, 2014 December 31, 2014 Vested benefit obligation $3,390 $2,180 Accumulated benefit obligation 2,180 3,070 Projected benefit obligation 2,340 3,250 Plan assets (fair value) 1,430 2,590 Settlement rate and expected rate of return 10 % Pension asset/liability 910 ? Service cost for the year 2014 410 Contributions (funding in 2014) 850 Benefits paid in 2014 280

Explanation / Answer

                                 

Part d)

Part c:

There is an Actuarial Gain of Rs 415/-

Part b:

Plan Assets A/c To bal bd 1430 By Benefits Paid 280 To contributions 850 to Expected Return 175 To Acturial Gain 415 By Bal cd 2590 2870 2870 Return (Expected) for First 6 Months 71.5 on Balance 6 Months 103.575 (1430+850+71.50-280)*10%*6/12 Total Expected Return 175.075 Actual Return 590

                                 

Related Questions

Navigate

• Browse (All)
• Browse E
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.