Company G offers a defined benefit pension plan to its employees. At December 31, 2018, the present value of the defined benefit obligation of the pension plan was $7,800,000 and the fair value of the plan assets was $8,000,000. Information pertaining to the pension plan in 2019 follows: • The actuary advised that current service cost was $900,000. • The discount rate used in actuarial assumptions was 5%. • On June 1, 2019, Company G retroactively improved the benefits under the plan to January 1, 2019. The cost of this improvement was determined by the plan actuary to be $975,000. • Benefits paid to retirees on July 1, 2019 were $750,000. • Company G contributed $675,000 to the pension plan on March 1, 2019. • The present value of the defined benefit obligation at December 31, 2019, was $8,125,000.

Company G offers a defined benefit pension plan to its employees. At December 31, 2018, the present value of the defined benefit obligation of the pension plan was $7,800,000 and the fair value of the plan assets was $8,000,000. Information pertaining to the pension plan in 2019 follows: • The actuary advised that current service cost was $900,000. • The discount rate used in actuarial assumptions was 5%. • On June 1, 2019, Company G retroactively improved the benefits under the plan to January 1, 2019. The cost of this improvement was determined by the plan actuary to be $975,000. • Benefits paid to retirees on July 1, 2019 were $750,000. • Company G contributed $675,000 to the pension plan on March 1, 2019. • The present value of the defined benefit obligation at December 31, 2019, was $8,125,000.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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