Bonny Corp. has a defined benefit pension plan for its employees who have an average remaining service life of 10 years. The following information is available for 20X1 and 20X2 related to the pension plan: Projected benefit obligation, 1/1 Service cost Actual return on plan assets Bonny Corp. contributions for year ended 12/31 Benefits paid during year Fair value of plan assets, 1/1 Actuarial (gain) loss on PBO during year Expected return on plan assets Discount rate 1. 2. 3. 4. 5. Answer is not complete. 20X2 PBO at 12/31 Plan assets at 12/31 Funded status of plan at 12/31 AOCI - net actuarial loss (gain) at 12/31 OCI for the year ended 12/31 Bonny Corp. had no beginning balance in its AOCI-net actuarial (gain) loss on January 1, 20X1. The actuarial (gains) losses on PBO arose due to changes in assumptions made by the actuaries regarding salary increases (20X1) and mortality estimates (20X2). Required: 1. Compute Bonny's PBO at December 31, 20X1, and December 31, 20X2. 2. Compute the fair value of plan assets at December 31, 20X1, and December 31, 20X2. $ $ $ ? $ 70,000 66,400 74,000 67,000 ? (13,000) 20X2 144,400 x $ (55,722) $ 200,122x 3. Compute the funded status of the plan at December 31, 20X1, and December 31, 20X2. 4. Compute the year-end balance in AOCI-net actuarial loss (gain) for Bonny Corp. for 20X1 and 20x2. 5. Compute OCI for the years ended December 31, 20X1, and December 31, 20X2. (For parts 3, 4, and 5, liabilities and losses should be indicated by a minus sign.) 78 68 20x1 $ 750,000 60,000 72,000 68,000 60,000 600,000 4,400 20X1 135,000 1,078 7% 68
Bonny Corp. has a defined benefit pension plan for its employees who have an average remaining service life of 10 years. The following information is available for 20X1 and 20X2 related to the pension plan: Projected benefit obligation, 1/1 Service cost Actual return on plan assets Bonny Corp. contributions for year ended 12/31 Benefits paid during year Fair value of plan assets, 1/1 Actuarial (gain) loss on PBO during year Expected return on plan assets Discount rate 1. 2. 3. 4. 5. Answer is not complete. 20X2 PBO at 12/31 Plan assets at 12/31 Funded status of plan at 12/31 AOCI - net actuarial loss (gain) at 12/31 OCI for the year ended 12/31 Bonny Corp. had no beginning balance in its AOCI-net actuarial (gain) loss on January 1, 20X1. The actuarial (gains) losses on PBO arose due to changes in assumptions made by the actuaries regarding salary increases (20X1) and mortality estimates (20X2). Required: 1. Compute Bonny's PBO at December 31, 20X1, and December 31, 20X2. 2. Compute the fair value of plan assets at December 31, 20X1, and December 31, 20X2. $ $ $ ? $ 70,000 66,400 74,000 67,000 ? (13,000) 20X2 144,400 x $ (55,722) $ 200,122x 3. Compute the funded status of the plan at December 31, 20X1, and December 31, 20X2. 4. Compute the year-end balance in AOCI-net actuarial loss (gain) for Bonny Corp. for 20X1 and 20x2. 5. Compute OCI for the years ended December 31, 20X1, and December 31, 20X2. (For parts 3, 4, and 5, liabilities and losses should be indicated by a minus sign.) 78 68 20x1 $ 750,000 60,000 72,000 68,000 60,000 600,000 4,400 20X1 135,000 1,078 7% 68
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
Vishal
Transcribed Image Text:Bonny Corp. has a defined benefit pension plan for its employees who have an average remaining service life of 10 years. The
following information is available for 20X1 and 20X2 related to the pension plan:
Projected benefit obligation, 1/1
Service cost
Actual return on plan assets
Bonny Corp. contributions for year ended 12/31
Benefits paid during year
Fair value of plan assets, 1/1
Actuarial (gain) loss on PBO during year
Expected return on plan assets
Discount rate
1.
2.
3.
4.
5.
Answer is not complete.
PBO at 12/31
Plan assets at 12/31
Funded status of plan at 12/31
AOCI - net actuarial loss (gain) at 12/31
OCI for the year ended 12/31
$
$
$
20X2
20X2
144,400 $
(55,722) × $
200,122 x
Bonny Corp. had no beginning balance in its AOCI-net actuarial (gain) loss on January 1, 20X1. The actuarial (gains) losses on PBO
arose due to changes in assumptions made by the actuaries regarding salary increases (20X1) and mortality estimates (20X2).
Required:
1. Compute Bonny's PBO at December 31, 20X1, and December 31, 20X2.
2. Compute the fair value of plan assets at December 31, 20X1, and December 31, 20X2.
3. Compute the funded status of the plan at December 31, 20X1, and December 31, 20X2.
4. Compute the year-end balance in AOCI-net actuarial loss (gain) for Bonny Corp. for 20X1 and 20X2.
5. Compute OCI for the years ended December 31, 20X1, and December 31, 20X2.
(For parts 3, 4, and 5, liabilities and losses should be indicated by a minus sign.)
20X1
? $750,000
60,000
72,000
68,000
60,000
600,000
4,400
$ 70,000
66,400
74,000
67,000
?
(13,000)
20X1
135,000
1,078
7%
6%
7%
6%
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