Cullumber Company sponsors a defined benefit pension plan. The corporation’s actuary provides the following information about the plan. January 1, 2020 December 31, 2020 Vested benefit obligation $1,560 $2,020 Accumulated benefit obligation 2,020 2,780 Projected benefit obligation 2,620 3,290 Plan assets (fair value) 1,860 2,690 Settlement rate and expected rate of return 10 % Pension asset/liability 760 ? Service cost for the year 2020 410 Contributions (funding in 2020) 750 Benefits paid in 202- 190 (a) Compute the actual return on the plan assets in 2020. Actual return on the plan assets $ (b) Compute the amount of the other comprehensive income (G/L) as of December 31, 2020. (Assume the January 1, 2020, balance was zero.) (Enter loss using either a negative sign preceding the number e.g. -45 or parentheses e.g. (45).) Net pension liability gains and losses $ (c) Compute the amount of net gain or loss amortization for 2020 (corridor approach). Net gain or loss amortization $ (d) Compute pension expense for 2020. Pension expense $
Cullumber Company sponsors a defined benefit pension plan. The corporation’s actuary provides the following information about the plan. January 1, 2020 December 31, 2020 Vested benefit obligation $1,560 $2,020 Accumulated benefit obligation 2,020 2,780 Projected benefit obligation 2,620 3,290 Plan assets (fair value) 1,860 2,690 Settlement rate and expected rate of return 10 % Pension asset/liability 760 ? Service cost for the year 2020 410 Contributions (funding in 2020) 750 Benefits paid in 202- 190 (a) Compute the actual return on the plan assets in 2020. Actual return on the plan assets $ (b) Compute the amount of the other comprehensive income (G/L) as of December 31, 2020. (Assume the January 1, 2020, balance was zero.) (Enter loss using either a negative sign preceding the number e.g. -45 or parentheses e.g. (45).) Net pension liability gains and losses $ (c) Compute the amount of net gain or loss amortization for 2020 (corridor approach). Net gain or loss amortization $ (d) Compute pension expense for 2020. Pension expense $
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
Cullumber Company sponsors a defined benefit pension plan. The corporation’s actuary provides the following information about the plan.
(a) Compute the actual return on the plan assets in 2020.
(b) Compute the amount of the other comprehensive income (G/L) as of December 31, 2020. (Assume the January 1, 2020, balance was zero.) (Enter loss using either a negative sign preceding the number e.g. -45 or parentheses e.g. (45).)
(c) Compute the amount of net gain or loss amortization for 2020 (corridor approach).
(d) Compute pension expense for 2020.
| January 1, 2020 |
December 31, 2020 |
||||||
| Vested benefit obligation | $1,560 | $2,020 | |||||
| Accumulated benefit obligation | 2,020 | 2,780 | |||||
| Projected benefit obligation | 2,620 | 3,290 | |||||
| Plan assets (fair value) | 1,860 | 2,690 | |||||
| Settlement rate and expected |
10 | % | |||||
| Pension asset/liability | 760 | ? | |||||
| Service cost for the year 2020 | 410 | ||||||
| Contributions (funding in 2020) | 750 | ||||||
| Benefits paid in 202- | 190 |
(a) Compute the actual return on the plan assets in 2020.
| Actual return on the plan assets |
$
|
(b) Compute the amount of the other comprehensive income (G/L) as of December 31, 2020. (Assume the January 1, 2020, balance was zero.) (Enter loss using either a negative sign preceding the number e.g. -45 or parentheses e.g. (45).)
| Net pension liability gains and losses |
$
|
(c) Compute the amount of net gain or loss amortization for 2020 (corridor approach).
| Net gain or loss amortization |
$
|
(d) Compute pension expense for 2020.
| Pension expense |
$
|
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