nvestments $ 66,129 Receivables 49,946 Investments at fair value 3,565,931 Total assets $3,682,006 Liabilities Benefits payable to current employees and retirees $ 4,212 Net position $3,677,794 A. The plan has been in operation for over 20 years and covers all school district employees. What is the most reasonable explanation of why th
The statement of fiduciary net position for a school district's defined benefit pension plan shows the following (in condensed form and in thousands)
Assets
Cash and short-term investments $ 66,129
Receivables 49,946
Investments at fair value 3,565,931
Total assets $3,682,006
Liabilities
Benefits payable to current employees
and retirees $ 4,212
Net position $3,677,794
A. The plan has been in operation for over 20 years and covers all school district employees. What is the most reasonable explanation of why the benefits payable to current employees and retirees is so small relative to plan assets?
B. Suppose that in the current year the school district’s annual required contribution was $6,300,000. In the past, the district has always paid the annual required contribution in full. However, in the current year the district budgeted and paid into the pension trust fund only $5,000,000.
1. Prepare the
2. Prepare the journal entry to record the year’s pension contribution for reporting in the district’s government-wide statements.
C. The district’s annual financial report indicated that its "normal cost" was $530,000 and that the "amortization of the unfunded actuarial accrued liability" was $100,000.
1. What is meant by "normal cost?"
2. What is meant by "unfunded actuarial accrued liability"? What are its principal causes? Why must it be amortized?
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