On January 1, 2021, Carla Vista Co. has the following balances:Projected benefit obligation $3850000Fair value of plan assets 3350000The settlement rate is 11%. Other data related to the pension plan for 2021 are:Service cost $307000Amortization of prior service costs due to increase in benefits 107000Contributions 507000Benefits paid 232000Actual return on plan assets 402000Amortization of net gain 30700The balance of the projected benefit obligation at December 31, 2021 is:$4580500.$4332500.$4348500.$4273500.

Answered: On January 1, 2021, Carla Vista Co. has…

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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On January 1, 2021, Carla Vista Co. has the following balances:

Projected benefit obligation			$3850000
Fair value of plan assets			3350000

The settlement rate is 11%. Other data related to the pension plan for 2021 are:

Service cost			$307000
Amortization of prior service costs due to increase in benefits			107000
Contributions			507000
Benefits paid			232000
Actual return on plan assets			402000
Amortization of net gain			30700

The balance of the projected benefit obligation at December 31, 2021 is:

$4580500.

$4332500.

$4348500.

$4273500.

Expert Solution

Working:

Settlement cost = Projected benefit obligation x settlement rate

= $3850000 x 11%

= $423,500

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