Please need help with accounting question Clark Industries has a defined benefit pension plan that specifies annualretirement benefits equal to:1.2% * Service years * Final year's salaryStanley Mills was hired by Clark at the beginning of 1994. Mills isexpected to retire at the end of 2038 after 45 years of service. Hisretirement is expected to span 15 years. At the end of 2013, 20 yearsafter being hired, his salary is $80,000. The company's actuary projectsMills's salary to be $270,000 at retirement. The actuary's discount rateis 7%.1. Estimate the amount of Stanley Mills's annual retirement payments forthe 15 retirement years earned as of the end of 2013.2. Suppose Clark's pension plan permits a lump-sum payment atretirement in lieu of annuity payments. Determine the lump-sumequivalent as the present value as of the retirement date of annuitypayments during the retirement period.3. What is the company's projected benefit obligation at the end of 2013with respect to Stanley Mills?

referencehttps://www.investopedia.com/terms/l/lump-sum-payment.asp

Answered: Clark Industries has a defined benefit…

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 1E

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