Accounting what is the funded status of barrel Barrel Corporation had service and interest costs of $50,000related to its defined benefit pension plan for the year endedDecember 31, Year 7. The company's unrecognized prior servicecost was $200,000 at December 31, Year 6 and the averageremaining service life of the company's employees was 20 years.Plan assets earned an expected and actual return of 10% duringYear 7. The company made contributions to the plan of $25,000and paid benefits of $30,000 during the year. The pension planhad plan assets with a fair value of $300,000 at December 31,Year 6. The PBO was $400,000 at December 31, Year 6, and$420,000 at December 31, Year 7. Barrel's expected tax rate is30%.What is the funded status of Barrel Corporation's pension planat December 31, Year 7?

Step 1:- Define Pension ExpensePension expense refers to the contribution amount made by a company…

Answered: Barrel Corporation had service and…

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 11RE

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Similar questions

Given the following information for Tyler Companys pension plan at the beginning of the year, calculate the corridor, excess net loss (gain), and amortized net loss (gain). Assume an average remaining service life of 15 years.
Strum Corp. has maintained a defined benefit pension plan for its employees for a number of years. For Year 4, current service cost was $37,000 and interest on the projected benefit obligation was $18,000. Strum's return on plan assets, actual and estimated, was S8,000. On December 31, Year 4, Strum Corp. contributed $30,000 to its pension plan. Strum's Year 4 pension expense was: O S63,000 O S47,000 O S55,000 O $30,000
On January 1 of the current reporting year, Coda Company's projected benefit obligation was $3,000,000. During the year, pension benefits paid by the trustee were $400,000. Service cost was $875,000 . Pension plan assets earned $325,000 as expected. At the end of the year, there was no net gain or loss and no prior service cost. The actuary's discount rate was 10%. Determine the amount of the projected benefit obligation at December 31.
Gruber Enterprises started its defined benefit pension plan on January 1, Year 1. By the beginning of Year 3, the company had accumulated $300,000 in pension plan assets and was already making benefit payments to its employees. During Year 3, Gruber paid out $20,000 in benefits and contributed $70,000 to the plan. The plan assets had a fair market value of 5377.000. What was the amount of the retun on plan assets in Year 3? O S7,000 O $27,000 O 537,000 O $47,000
. Phillip Company has a defined benefit pension plan. At the end of the reporting year, the following data were available: beginning PBO, $75,000; service cost, $18,000; interest cost, $5,000; benefits paid for the year, $9,000; ending PBO, $89,000; the expected return on plan assets, $10,000; and cash deposited with pension trustee, $17,000. There were no other pension-related costs. The journal entry to record the annual pension costs will include a credit to the PBO for: A. $23,000. B. $17,000. C. $18,000. D. $13,000. .
Cey Company has a defined benefit pension plan. Cey's policy is to fund net periodic pension cost annually, payment to an independent trustee being made 2 months after the end of each year. Data relating to the pension plan for year 5 are as follows: Net pension cost for year 5 Unrecognized prior service cost, 12/31/Y5 Accumulated benefit obligation, 12/31/Y5 Fair value of plan assets, 12/31/Y5 Projected benefit obligation 12/31/Y5 How much should appear on Cey's balance sheet at December 31, year 5, for pension liability? Current $190,000 $190,000 $0 Noncurrent $150,000 $330,000 $0 $190,000 150,000 480,000 500,000 500,000 $480,000
Harvey Hotels has provided a defined benefit pension plan for its employees for several years. At the end of the most recent year, the following information was available with regard to the plan: service cost: $6.2 million, expected return on plan assets: $1.2 million, actual return on plan assets: $1 million, interest cost: $1.4 million, payments to retired employees: $2 million, and amortization of prior service cost (created when the pension plan was amended causing a drop in the projected benefit obligation): $1.1 million. What amount should Harvey Hotels report as pension expense in its income statement for the year? A- 1.4 million B-7.5 million C- 7.7 million D- 8.7 million O A O B O C O D
Babcock Company received the following reports of its defined benefit pension plan for the current calendar year: PBO Plan assets Balance, January 1 $ 600,000 Balance, January 1 $ 500,000 Service cost 360,000 Actual return 50,000 Interest cost 64,000 Annual contribution 220,000 Benefits paid (90,000) Benefits paid (90,000) Balance, December 31 $ 934,000 Balance, December 31 $ 680,000 The long-term expected rate of return on plan assets is 8%. Assuming no other data are relevant, what is the pension expense for the year?
Urban Life Ltd. sponsors a defined benefit pension plan for its employees. It is now the 20X9 fiscal year. An appropriate interest rate for long-term debt is 7%. Information with respect to the plan is as follows: Fair value of plan assets, 31 December 20X8 Defined benefit obligation, 31 December 20X8 Actual return on plan assets for 20X9 Past service cost from amendment dated 1 January 20x9, liability is reduced because benefits were reduced. Actuarial revaluation dated 31 December 20X9; liability is reduced because of changed mortality assumptions. Funding payment at year-end 20X9 Benefits paid to retirees during 20X9 Current service cost for 20x9 $5,473,000 6,649,000 62,600 (218,200) (618,700) 525,000 120,000 257,900 Required: 1. Calculate the SFP net defined benefit pension liability as of 31 December 20X8. Net defined benefit pension liability, 31 December 20X8
On January 1 of the current reporting year, Coda Company's projected benefit obligation was $29.3 million. During the year, pension benefits paid by the trustee were $3.3 million. Service cost was $9.3 million. Pension plan assets earned $4.3 million as expected. At the end of the year, there was no net gain or loss and no prior service cost. The actuary's discount rate was 10%. Required:Determine the amount of the projected benefit obligation at December 31. (Enter your answers in millions rounded to 2 decimal places. Amounts to be deducted should be indicated with a minus sign.)
Brooks Co. had pension plan assets and PBO of $150,000 on 1/1/24. Service cost for the year was $30,000. It contributed $28,000 during the year and paid benefits of $20,000. The interest rate was 10%. The actual return was $14,000. Compute pension expense. Show computations'
A company's defined benefit pension plan incurs current service cost of $4,000,000. his pension plan's assets generated $2,500,000 of income, which exceeded expectations by $500,000. Pension obligations incurred interest cost of $1,500,000, which were $700,000 below expectations. During the year, the company increased benefits in the pension plan and incurred $800,000 for past service cost. What is the pension expense for the year? o A) $3,800,000 • B) $4,600,000 • C) $5,600,000 o D) $5,000,000 O 2. What are actuarial losses or gains in a defined benefit plan? • A) Difference arising between the actual and the expected value of plan contributions. o B) Expected income earned on the pension plan assets. o c) Differences arising between the actual and expected values of the obligation. o D) Plan amendments that retrospectively improve pension plan benefits.

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