On January 1, 2016, Burleson Corporation’s projected benefit obligation was $30 million. During 2016 pension benefits paid by the trustee were $4 million. Service cost for 2016 is $12 million. Pension plan assets (at fair value) increased during 2016 by $6 million as expected. At the end of 2016, there was no prior service cost and a negligible balance in net loss–AOCI. The actuary’s discount rate was 10%. Required: Determine the amount of the projected benefit obligation at December 31, 2016.

On January 1, 2016, Burleson Corporation’s projected benefit obligation was $30 million. During 2016 pension benefits paid by the trustee were $4 million. Service cost for 2016 is $12 million. Pension plan assets (at fair value) increased during 2016 by $6 million as expected. At the end of 2016, there was no prior service cost and a negligible balance in net loss–AOCI. The actuary’s discount rate was 10%. Required: Determine the amount of the projected benefit obligation at December 31, 2016.

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 7RE

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