3. Problem 30-03 (Plan Funding)Plan FundingeBookConsolidated Industries is planning to operate for 10 more years and then cease operations. At that time (in 10 years), it expects to have the following pension benefit obligations:Year11-1516-2021-25Annual Total Payment$3,480,0002,980,00026-3031-352,480,0001,980,0001,480,000The current value of the firm's pension fund is $5.6 million. Assume that all cash flows occur at year-end.a. Consolidated's expected return on pension assets is 11%, and it uses 11% to discount the expected pension benefit payments. What is the present value of the firm's pension fund benefits? Do not roundintermediate calculations. Round your answer to the nearest dollar.$b. Is the plan underfunded or overfunded? Do not round intermediate calculations. Round your answer to two decimal places.Funding ratio=which means the assets are select than the PV of benefits and the plan isselectLess or greaterSelectunderfundedoverfunded

The question requires the determination of the present value of the firm's pension fund. Present…

Answered: 3. Problem 30-03 (Plan Funding) Plan…

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

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3b. The following information is available for the pension plan of Vaughn Company for the year 2020. Actual and expected return on plan assets $ 14,700 Benefits paid to retirees 40,800 Contributions (funding) 81,100 Interest/discount rate 10 % Prior service cost amortization 7,600 Projected benefit obligation, January 1, 2020 458,000 Service cost 63,900 (a) Your answer has been saved. See score details after the due date. Compute pension expense for the year 2020. Pension expense for 2020 $enter pension expense for 2017 in dollars Attempts: 1 of 1 used (b) Prepare the journal entry to record pension expense and the employer’s contribution to the pension plan in 2020. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for…
Current Attempt in Progress Cullumber Corporation reports the following January 1, 2020 balances for its defined benefit pension plan, which it accounts for under IFRS: plan assets, $460,000; defined benefit obligation, $460,000. Other data relating to three years of operation of the plan are as follows: 2020 2021 2022 $36,400 $43,700 $58,400 Annual service cost 10% 10% 10% Discount rate 38,700 50,460 53,800 Actual return on plan assets 36,400 43,700 58,400 Funding of current service cost 66,000 79,000 Funding of past service cost 30,500 37,450 47,200 Benefits paid 364,000 Past service cost (plan amended. 1/1/21) Change in actuarial assumptions establishes a December 31. 2022 defined benefit obligation of 1.196,000 Prepare and complete a pension work sheet for 2020.
#13On January 1, 2020, Shaina company had a projected benefit obligation of 2,500,000 and apension fund with a fair value of 2,300,000. The entity provided the following informationrelated to the pension plan during the current year:Current service cost 300,000Actual return on the pension fund 62,500Benefits paid to retirees 275,000Contribution to the pension fund 262,500Discount rate 9%Expected return on pension fund 10%What is the pension expense for the current year? The answer is 318,000 pls provide the correct solution for this
Current Attempt in Progress Bramble Company provides the following information about its defined benefit pension plan for the year 2020. Service cost $ 90,300 Contribution to the plan 106,800 Prior service cost amortization 9,600 Actual and expected return on plan assets 63,800 Benefits paid 39,700 Plan assets at January 1, 2020 629,900 Projected benefit obligation at January 1, 2020 706,100 Accumulated OCI (PSC) at January 1, 2020 150,800 Interest/discount (settlement) rate 10 % Compute the pension expense for the year 2020. Pension expense for 2020 $ %24
Presented below is information related to Blossom Retail Stores, Inc. pension plan for 2026: Service cost = $762,000 Funding contribution for 2026 = 612,000 Settlement rate used in actuarial computation = 10% Expected return on plan assets = 9% Actual return on plan assets for 2026 = 137,000 Amortization of PSC (due to benefit increase) = 112,000 Projected benefit obligation (at beginning of period) = 812,000 Fair value of plan assets (at beginning of period) = 762,000 OCI-Gain-osses (at beginning of period) = 86,200DR L Average service life of all covered employees = 25 years (a) compute the unexpected gain or loss for 2026, if any. (b) compute any necessary OCI Gains - losses amortization for 2026.
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5b. Indigo Company provides the following information about its defined benefit pension plan for the year 2020. Service cost $91,000 Contribution to the plan 104,000 Prior service cost amortization 9,400 Actual and expected return on plan assets 62,900 Benefits paid 39,900 Plan assets at January 1, 2020 630,400 Projected benefit obligation at January 1, 2020 701,800 Accumulated OCI (PSC) at January 1, 2020 153,000 Interest/discount (settlement) rate 10 % (b) Prepare the journal entry recording pension expense. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.) Account Titles and Explanation Debit Credit enter an account title enter a debit amount enter a credit amount enter an account title enter a debit amount enter a credit amount enter an…
10. Headland Company adopts acceptable accounting for its defined benefit pension plan on January 1, 2019, with the following beginning balances: plan assets $201,400; projected benefit obligation $245,000. Other data relating to 3 years’ operation of the plan are as follows. 2019 2020 2021 Annual service cost $15,800 $19,400 $26,100 Settlement rate and expected rate of return 10 % 10 % 10 % Actual return on plan assets 18,000 22,150 24,000 Annual funding (contributions) 15,800 40,000 47,500 Benefits paid 13,700 16,500 20,800 Prior service cost (plan amended, 1/1/20) 160,000 Amortization of prior service cost 53,800 41,700 Change in actuarial assumptions establishes a December 31, 2021, projected benefit obligation of: 522,200 (a) Prepare a pension worksheet presenting all 3 years’ pension balances and activities. (Enter all…
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Sandhill Company provides the following selected information related to its defined benefit pension plan for 2025. Pension asset/liability (January 1) $25.500 Cr. Accumulated benefit obligation (December 31) 403,100 Actual and expected return on plan assets 9,000 Contributions (funding) in 2025 148,600 Fair value of plan assets (December 31) 795,800 Settlement rate 10% Projected benefit obligation (January 1) 702.800 Service cost 79.580 (a1) Your answer is correct. Compute pension expense. Pension expense for 2025 $ 140860 i Prepare the journal entry to record pension expense and the employer's contribution to the pension plan in 2025. Preparation of a pension worksheet is not required. Benefits paid in 2025 were $39,100. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter O for the amounts. List all debit entries before credit entries.) Account Titles and…
The following defined pension data of Sunland Corp. apply to the year 2025. Projected benefit obligation, 1/1/25 (before amendment) $568,000 Plan assets, 1/1/25 553,400 Pension liability, 1/1/25 14,600 On January 1, 2025, Sunland Corp., through plan amendment, grants prior service benefits having this present value 130,000 Settlement rate 10% Service cost 58,500 Contributions (funding) 64,300 Actual (expected) return on plan assets 47,100 Benefits paid to retirees 36,300 Prior service cost amortization for 2025 17,400 For 2025, prepare a pension worksheet for Sunland that shows the journal entry for pension expense and the year-end balances in the related pension accounts. (Enter all amounts as positive. If no entriesthen the input box should be left blank.)
6. Baker Co. provides the following information related to its pension plan for the year 2022: Beginning Balances - January 1, 2022 Plan Assets - $434,000 Projected Benefit Obligation - $436,700 Pension Asset/Liability - $2,700 ç Accumulated OCI – Prior Service Cost - $0 Plan amendment for Prior Service Cost - $85,000 Annual Service Cost - $41,000 Settlement Rate - 10% Actual Return on Plan Assets - $55,200 Expected Return on Plan Assets - $46,000 Funding Contributions - $76,000 Benefits Paid to Retirees during the year - $61,500 Amortization of Prior Service Cost - $4,250 (Straight Line) Complete a Pension Worksheet using the above data. b. What is total Pension Expense to be reported in 2022? What is the balance of each of the following at December 31, 2022? a. C. Plan Assets Projected Benefit Obligation Pension Asset/Liability Accumulated oCi- Prior Service Cost d. Prepare the journal entry Baker Co. will make to record their pension expense for 2022

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