1. Compute 2022 net periodic pension expense.
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 4MC
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![1. Compute 2022 net periodic pension expense.
The 2022 records of MPS Company provided the following data related to its noncontributory,
defined benefit pension plan (amounts in PO00s):
a. Accumulated benefit obligation (report of actuary)
Beginning balance
P3,000
Service cost
1,200
Interest cost
240
Pension benefits paid
Ending balance
(400)
P4,040
Discount rate used by actuary, 8%
b. Plan assets at fair value (report of trustee):
Beginning balance
Actual return on plan assets
Contributions
P2,400
168
1,016
(400)
Pension benefits paid
Ending balance
Р3,192
Expected long-term rate of return of plan assets, 7%
c. January 1, 2022, balance of unrecognized prior service cost, gains and losses, and transaction
cost, zero.](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F837474a3-cec9-4741-9ee6-e92fe753ce57%2F90a0585a-9cec-4e49-8ee0-693f5c104222%2Fbtvjcgi_processed.png&w=3840&q=75)
Transcribed Image Text:1. Compute 2022 net periodic pension expense.
The 2022 records of MPS Company provided the following data related to its noncontributory,
defined benefit pension plan (amounts in PO00s):
a. Accumulated benefit obligation (report of actuary)
Beginning balance
P3,000
Service cost
1,200
Interest cost
240
Pension benefits paid
Ending balance
(400)
P4,040
Discount rate used by actuary, 8%
b. Plan assets at fair value (report of trustee):
Beginning balance
Actual return on plan assets
Contributions
P2,400
168
1,016
(400)
Pension benefits paid
Ending balance
Р3,192
Expected long-term rate of return of plan assets, 7%
c. January 1, 2022, balance of unrecognized prior service cost, gains and losses, and transaction
cost, zero.
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