On January 1, 2020, Blue Company has the following defined benefit pension plan balances. Projected benefit obligation $4,506,000 Fair value of plan assets 4,220,000 The interest (settlement) rate applicable to the plan is 10%. On January 1, 2021, the company amends its pension agreement so that prior service costs of $508,000 are created. Other data related to the pension plan are as follows. 2020 2021 Service cost $152,000 $179,000 Prior service cost amortization 0 91,000 Contributions (funding) to the plan 237,000 281,000 Benefits paid 202,000 284,000 Actual return on plan assets 253,200 262,000 Expected rate of return on assets 6 % 8

On January 1, 2020, Blue Company has the following defined benefit pension plan balances. Projected benefit obligation $4,506,000 Fair value of plan assets 4,220,000 The interest (settlement) rate applicable to the plan is 10%. On January 1, 2021, the company amends its pension agreement so that prior service costs of $508,000 are created. Other data related to the pension plan are as follows. 2020 2021 Service cost $152,000 $179,000 Prior service cost amortization 0 91,000 Contributions (funding) to the plan 237,000 281,000 Benefits paid 202,000 284,000 Actual return on plan assets 253,200 262,000 Expected rate of return on assets 6 % 8

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 6MC

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Projected benefit obligation		$4,506,000
Fair value of plan assets		4,220,000

	2020		2021
Service cost	$152,000			$179,000
Prior service cost amortization	0			91,000
Contributions (funding) to the plan	237,000			281,000
Benefits paid	202,000			284,000
Actual return on plan assets	253,200			262,000
Expected rate of return on assets	6	%		8	%