PROBLEM 3-8 Predicting Pension Expense The weighted-average discount rate used in determining General Energy Co's actuarial present value of its pension obligation is 8.5%, and the assumed rate of increase in future compensation is 7.5%. The expected long-term rate of return on its plan assets is 11.5%. Its pension obligation at the end of Year 6 is $2,212,000, and its accumulated benefit obligation is $479,000. Fair value of its assets is $3,238,000. The service cost for Year 6 is $586,000. CHECK Required: Predicted expense, Predict General Energy Co.s Year 7 net periodic pension expense given a 10% growth in service cost, the amortization of deferred loss over 30 years, and no change in the other assumed rates. Show calculations. $463 mil.

PROBLEM 3-8 Predicting Pension Expense The weighted-average discount rate used in determining General Energy Co's actuarial present value of its pension obligation is 8.5%, and the assumed rate of increase in future compensation is 7.5%. The expected long-term rate of return on its plan assets is 11.5%. Its pension obligation at the end of Year 6 is $2,212,000, and its accumulated benefit obligation is $479,000. Fair value of its assets is $3,238,000. The service cost for Year 6 is $586,000. CHECK Required: Predicted expense, Predict General Energy Co.s Year 7 net periodic pension expense given a 10% growth in service cost, the amortization of deferred loss over 30 years, and no change in the other assumed rates. Show calculations. $463 mil.

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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