Determination of Projected Benefit Obligation Several years ago, Lewad Company established a defined benefit pension plan for its employees. The following information is available for 2019 in regard to its pension plan: (1) discount rate, 10%; (2) service cost, $142,000; (3) plan assets (1/1), $659,000 (4) expected return on plan assets, $65,900 There is no amortization of prior service cost, and there is no gain or loss. On December 31, 2019, Lewad contributed $143,000 to the pension plan, resulting in a credit to Accrued/Prepaid Pension Cost of $8,200. Required: 1. Compute the amount of Lewad's projected benefit obligation on January 1, 2019. $ X 2. If Lewad were to decrease its discount rate, pension expense would be lower the interest cost component would be smaller ✓. because
Determination of Projected Benefit Obligation Several years ago, Lewad Company established a defined benefit pension plan for its employees. The following information is available for 2019 in regard to its pension plan: (1) discount rate, 10%; (2) service cost, $142,000; (3) plan assets (1/1), $659,000 (4) expected return on plan assets, $65,900 There is no amortization of prior service cost, and there is no gain or loss. On December 31, 2019, Lewad contributed $143,000 to the pension plan, resulting in a credit to Accrued/Prepaid Pension Cost of $8,200. Required: 1. Compute the amount of Lewad's projected benefit obligation on January 1, 2019. $ X 2. If Lewad were to decrease its discount rate, pension expense would be lower the interest cost component would be smaller ✓. because
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Am. 115.
Transcribed Image Text:Determination of Projected Benefit Obligation
Several years ago, Lewad Company established a defined benefit pension plan for its employees.
The following information is available for 2019 in regard to its pension plan:
(1) discount rate, 10%;
(2) service cost, $142,000;
(3) plan assets (1/1), $659,000
(4) expected return on plan assets, $65,900
There is no amortization of prior service cost, and there is no gain or loss. On December 31, 2019,
Lewad contributed $143,000 to the pension plan, resulting in a credit to Accrued/Prepaid Pension
Cost of $8,200.
Required:
1. Compute the amount of Lewad's projected benefit obligation on January 1, 2019.
$
+A
2. If Lewad were to decrease its discount rate, pension expense would be lower
the interest cost component would be smaller
because
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