Carla Vista, Inc. on January 1, 2021 initiated a noncontributory, defined-benefit pension plan that grants benefits to its 109 employees for services rendered in years prior to the adoption of the pension plan. The total expected service-years of the 109 employees who are expected to receive benefits under the plan is 1,308. An actuarial consulting firm has indicated that the present value of the projected benefit obligation on January 1, 2021 was $5,628,000. On December 31, 2021 the following information was provided concerning the pension plan's operations for its first year. Employer's contribution at end of year Service cost Projected benefit obligation Plan assets (at fair value) Expected return on plan assets Settlement rate $1,690,000 690,000 6,606,600 1,690,000 9% W 8%
Carla Vista, Inc. on January 1, 2021 initiated a noncontributory, defined-benefit pension plan that grants benefits to its 109 employees for services rendered in years prior to the adoption of the pension plan. The total expected service-years of the 109 employees who are expected to receive benefits under the plan is 1,308. An actuarial consulting firm has indicated that the present value of the projected benefit obligation on January 1, 2021 was $5,628,000. On December 31, 2021 the following information was provided concerning the pension plan's operations for its first year. Employer's contribution at end of year Service cost Projected benefit obligation Plan assets (at fair value) Expected return on plan assets Settlement rate $1,690,000 690,000 6,606,600 1,690,000 9% W 8%
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
Urmilaben
Transcribed Image Text:Carla Vista, Inc. on January 1, 2021 initiated a noncontributory, defined-benefit pension plan that grants benefits to its 109 employees
for services rendered in years prior to the adoption of the pension plan. The total expected service-years of the 109 employees who
are expected to receive benefits under the plan is 1,308. An actuarial consulting firm has indicated that the present value of the
projected benefit obligation on January 1, 2021 was $5,628,000. On December 31, 2021 the following information was provided
concerning the pension plan's operations for its first year.
Employer's contribution at end of year
Service cost
Projected benefit obligation
Plan assets (at fair value)
Expected return on plan assets
Settlement rate
(a)
Pension expense
$1,690,000
$
690,000
6,606,600
1,690,000
Compute the pension expense recognized in 2021. Assume the prior service cost is amortized over the average remaining service
life of the employees.
8%
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
This is a popular solution!
Trending now
This is a popular solution!
Step by step
Solved in 3 steps with 2 images
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Recommended textbooks for you
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education