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Chapter 20: Question 6BE (page 1162)

At December 31, 2017, Besler Corporation had a projected benefit obligation of \(560,000, plan assets of \)322,000, and prior service cost of $127,000 in accumulated other comprehensive income. Determine the pension asset/liability at December 31, 2017.

Short Answer

Expert verified

Comprehensive income is the type of income an organization earns from its sale of financial securitiesdue to its price changesin the market. It is represented under the organization's financial statements.

Step by step solution

01

Given the amounts:

Particulars

Amount

Projected benefit obligation

$560,000

Prior service cost

$127,000

Plan assets

$322,000

02

Computation of pension asset/liability at December 31, 2017

PensionLiability=-Projectedbenefitobligation+Planassetsatfairvalue=$560,000+$322,000=-$238,000

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Most popular questions from this chapter

In examining the costs of pension plans, Helen Kaufman, CPA, encounters certain terms. The components of pension costs that the terms represent must be dealt with appropriately if generally accepted accounting principles are to be reflected in the financial statements of entities with pension plans. Instructions (a) (1) Discuss the theoretical justification for accrual recognition of pension costs. (2) Discuss the relative objectivity of the measurement process of accrual versus cash (pay-as-you-go) accounting for annual pension costs. (b) Explain the following terms as they apply to accounting for pension plans. (1) Market-related asset value. (2) Projected benefit obligation. (3) Corridor approach. (c) What information should be disclosed about a company’s pension plans in its financial statements and its notes?

Using the information in E20-13 about Erickson Company’s defined benefit pension plan, prepare a 2017 pension worksheet with supplementary schedules of computations. Prepare the journal entries at December 31, 2017, to record pension expense and related pension transactions. Also, indicate the pension amounts reported in the balance sheet.

What are the major differences between postretirement healthcare benefits and pension benefits?

Question: What is service cost, and what is the basis of its measurement?

Englehart Co. provides the following information about its postretirement benefit plan for the year 2017. Service cost $ 90,000 Prior service cost amortization 3,000 Contribution to the plan 56,000 Actual and expected return on plan assets 62,000 Benefits paid 40,000 Plan assets at January 1, 2017 710,000 Accumulated postretirement benefit obligation at January 1, 2017 760,000 Accumulated OCI (PSC) at January 1, 2017 100,000 Dr. Discount rate 9% Instructions Compute the postretirement benefit expense for 2017.
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