Cummings Inc. had the following reconciliation at December 31, 20X0: Fair value of plan assets $ 5,000 PBO 4,200 Funded status $ 800 AOCI—prior service cost $ 300 AOCI—net actuarial loss 700 Total pension AOCI loss $ 1,000 The following assumptions are being used for the pension plan in 20X1: Discount rate 5 % Expected rate of return on plan assets 8 % Average remaining work life 10 Years Remaining amortization period for prior service costs 6 Years Additional 20X1 Information: Service cost $ 442 Cash contributed to the plan (year-end) 250 Pension benefits paid by the plan (year-end) 465 Actual return on plan assets 673 New actuarial loss on the PBO 64 Required: Compute pension expense for 20X1. Compute the fair value of plan assets at December 31, 20X1. Compute the PBO at December 31, 20X1. Compute AOCI—net actuarial loss as of December 31, 20X1.
Cummings Inc. had the following reconciliation at December 31, 20X0: Fair value of plan assets $ 5,000 PBO 4,200 Funded status $ 800 AOCI—prior service cost $ 300 AOCI—net actuarial loss 700 Total pension AOCI loss $ 1,000 The following assumptions are being used for the pension plan in 20X1: Discount rate 5 % Expected rate of return on plan assets 8 % Average remaining work life 10 Years Remaining amortization period for prior service costs 6 Years Additional 20X1 Information: Service cost $ 442 Cash contributed to the plan (year-end) 250 Pension benefits paid by the plan (year-end) 465 Actual return on plan assets 673 New actuarial loss on the PBO 64 Required: Compute pension expense for 20X1. Compute the fair value of plan assets at December 31, 20X1. Compute the PBO at December 31, 20X1. Compute AOCI—net actuarial loss as of December 31, 20X1.
Intermediate Accounting: Reporting And Analysis
3rd Edition
ISBN:9781337788281
Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Chapter19: Accounting For Post Retirement Benefits
Section: Chapter Questions
Problem 7E
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Question
Cummings Inc. had the following reconciliation at December 31, 20X0:
Fair value of plan assets | $ | 5,000 | |
PBO | 4,200 | ||
Funded status | $ | 800 | |
AOCI—prior service cost | $ | 300 | |
AOCI—net actuarial loss | 700 | ||
Total pension AOCI loss | $ | 1,000 | |
The following assumptions are being used for the pension plan in 20X1:
Discount rate | 5 | % |
Expected |
8 | % |
Average remaining work life | 10 | Years |
Remaining amortization period for prior service costs | 6 | Years |
Additional 20X1 Information:
Service cost | $ | 442 | |
Cash contributed to the plan (year-end) | 250 | ||
Pension benefits paid by the plan (year-end) | 465 | ||
Actual return on plan assets | 673 | ||
New actuarial loss on the PBO | 64 | ||
Required:
- Compute pension expense for 20X1.
- Compute the fair value of plan assets at December 31, 20X1.
- Compute the PBO at December 31, 20X1.
- Compute AOCI—net actuarial loss as of December 31, 20X1.
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