A. At the beginning of current year, an entity provided the following information in connection with a defined benefit plan: Fair value of plan assets 10,000,000 Projected benefit obligation (13,000,000) Prepaid /accrued benefit cost (3,000,000) The entity revealed the following transactions affecting the plan for the current year: Current service cost 2,500,000 Past service cost - remaining vesting period of covered employees is 5 years 1,200,000 Contribution to the plan 3,500,000 Benefits paid to retirees 3,000,000 Actual return on plan assets 1,500,000 Decrease in projected benefit obligation due to change in actuarial assumptions 400,000 Discount rate 10% Expected return on plan assets 12% Compute the projected benefit obligation at year-end What amount should be reported as accrued or prepaid benefit cost at year-end
A. At the beginning of current year, an entity provided the following information in connection with a
defined benefit plan:
Fair value of plan assets 10,000,000
Projected benefit obligation (13,000,000)
Prepaid /accrued benefit cost (3,000,000)
The entity revealed the following transactions affecting the plan for the current year:
Current service cost 2,500,000
Past service cost - remaining vesting period of covered employees is 5 years 1,200,000
Contribution to the plan 3,500,000
Benefits paid to retirees 3,000,000
Actual return on plan assets 1,500,000
Decrease in projected benefit obligation due to change in actuarial assumptions 400,000
Discount
Expected return
Compute the projected benefit obligation at year-end
What amount should be reported as accrued or prepaid benefit cost at year-end
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