ons or estimates were revised during 2024. the estimated return was based on the actual return on similar investm n't change, that also was the actual rate in 2025. ch of the following amounts as of both December 31, 2024, and Decem your answers in thousands (i.e., 200,000 should be entered as 200). > Answer is complete but not entirely correct. December 31, December 31, 2024 2025 enefit obligation pense asset (liability) $ $ $ $ 150 160 150 (10) $ $ LA SA $ 359 x 346 193 13 x
ons or estimates were revised during 2024. the estimated return was based on the actual return on similar investm n't change, that also was the actual rate in 2025. ch of the following amounts as of both December 31, 2024, and Decem your answers in thousands (i.e., 200,000 should be entered as 200). > Answer is complete but not entirely correct. December 31, December 31, 2024 2025 enefit obligation pense asset (liability) $ $ $ $ 150 160 150 (10) $ $ LA SA $ 359 x 346 193 13 x
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
Transcribed Image Text:Stanley-Morgan Industries adopted a defined benefit pension plan on April 12, 2024. The provisions of the plan were not made
retroactive to prior years. A local bank, engaged as trustee for the plan assets, expects plan assets to earn a 10% rate of return. The
actual return was also 10% in 2024 and 2025.* A consulting firm, engaged as actuary, recommends 4% as the appropriate discount
rate. The service cost is $150,000 for 2024 and $280,000 for 2025. Year-end funding is $160,000 for 2024 and $170,000 for 2025.
No assumptions or estimates were revised during 2024.
*We assume the estimated return was based on the actual return on similar investments at the inception of the plan and that, since the
estimate didn't change, that also was the actual rate in 2025.
Required:
Calculate each of the following amounts as of both December 31, 2024, and December 31, 2025:
Note: Enter your answers in thousands (i.e., 200,000 should be entered as 200). Enter a liability as a negative amount.
X Answer is complete but not entirely correct.
December 31,
2024
December 31,
2025
1. Projected benefit obligation
2. Plan assets
3. Pension expense
4. Net pension asset (liability)
$
$
$
$
150
160
150
(10)
$
$
$
359 X
346
193 X
13
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