PROBLEM 3-8 Predicting Pension Expense The weighted-average discount rate used in determining General Energy Co's actuarial present value of its pension obligation is 8.5%, and the assumed rate of increase in future compensation is 7.5%. The expected long-term rate of return on its plan assets is 11.5%. Its pension obligation at the end of Year 6 is $2,212,000, and its accumulated benefit obligation is $479,000. Fair value of its assets is $3,238,000. The service cost for Year 6 is $586,000. CHECK Required: Predicted expense, Predict General Energy Co.s Year 7 net periodic pension expense given a 10% growth in service cost, the amortization of deferred loss over 30 years, and no change in the other assumed rates. Show calculations. $463 mil.
PROBLEM 3-8 Predicting Pension Expense The weighted-average discount rate used in determining General Energy Co's actuarial present value of its pension obligation is 8.5%, and the assumed rate of increase in future compensation is 7.5%. The expected long-term rate of return on its plan assets is 11.5%. Its pension obligation at the end of Year 6 is $2,212,000, and its accumulated benefit obligation is $479,000. Fair value of its assets is $3,238,000. The service cost for Year 6 is $586,000. CHECK Required: Predicted expense, Predict General Energy Co.s Year 7 net periodic pension expense given a 10% growth in service cost, the amortization of deferred loss over 30 years, and no change in the other assumed rates. Show calculations. $463 mil.
Corporate Financial Accounting
14th Edition
ISBN:9781305653535
Author:Carl Warren, James M. Reeve, Jonathan Duchac
Publisher:Carl Warren, James M. Reeve, Jonathan Duchac
Chapter10: Liabilities: Current, Installment Notes, And Contingencies
Section: Chapter Questions
Problem 10.1EX: Current liabilities Bon Nebo Co. sold 25,000 annual subscriptions of Bjorn for 85 during December...
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