The Corporation has developed the following information (photo attached) for the company's defined benefit pension for 2020: Service cost $1,000,000 Actual return on plan assets 500,000 Annual contribution to the plan 1,840,000 Prior service cost from pension plan amendment in 2019: 2,500,000 Benefits paid to retirees 120,000 Average remaining service life of employees 10 years Interest rate 10% Expected rate of return on plan assets 8% Plan Asset, beginning balance $5,500,000 PBO, beginning balance $8,000,000 The accumulated benefit obligation at December 31, 2020, amounted to $6,500,000. Required: 1. Calculate the ending balance of Plan Asset in 2020 2. Calculate the ending balance of Projected Benefit Obligation in 2020
The Corporation has developed the following information (photo attached) for the company's defined benefit pension for 2020:
Service cost $1,000,000
Actual return on plan assets 500,000
Annual contribution to the plan 1,840,000
Prior service cost from pension plan amendment in 2019: 2,500,000
Benefits paid to retirees 120,000
Average remaining service life of employees 10 years
Interest rate 10%
Expected
Plan Asset, beginning balance $5,500,000
PBO, beginning balance $8,000,000
The accumulated benefit obligation at December 31, 2020, amounted to $6,500,000.
Required:
1. Calculate the ending balance of Plan Asset in 2020
2. Calculate the ending balance of Projected Benefit Obligation in 2020
Step by step
Solved in 3 steps
