**Educational Content: Pension Plan Accounting****Defined Benefit Pension Plan – 2021 Report**Sony, Inc.’s defined benefit pension plan provided the following information for the year 2021:- **Projected Benefit Obligation, January 1:** $500,000- **Service Cost:** $35,000- **Interest Cost:** $40,000- **Benefits Paid to Retirees:** $72,000- **Plan Assets, January 1:** $450,000- **Annual Contribution to Plan Assets:** $100,000- **Actual Return on Plan Assets:** $33,000- **Expected Return on Plan Assets:** 10%**Question:**"What is the value of Sony's plan assets at December 31, 2021?"**Multiple Choice Options:**- $511,000- $523,000- $595,000- $583,000**Explanation of Concepts:**A defined benefit pension plan refers to an employer-sponsored plan where employee benefits are calculated according to a formula using factors such as salary history and duration of employment. For accounting purposes, companies need to report their pension obligations and plan assets.- **Projected Benefit Obligation (PBO)** is the present value of benefits owed to employees for their service up to a specific date. - **Service Cost** represents the increase in PBO due to employees’ service in the current period.- **Interest Cost** is the interest on the beginning balance of the PBO, usually based on a settlement rate.- **Benefits Paid** are payments made to retirees.- **Plan Assets** begin with the balance at the start of the period, adjusted by contributions, return on assets, and benefits paid. - **Annual Contributions** are amounts added by the company to the plan assets to fund future obligations.- **Return on Plan Assets** indicates the actual earnings from investments, which can differ from the expected rate.In calculations, the value of plan assets at year-end considers the sum of the opening balance, contributions, and actual returns, minus benefits paid.**Calculation Steps:**1. Start with Plan Assets, January 1: $450,0002. Add Annual Contribution: $100,0003. Add Actual Return on Plan Assets: $33,0004. Subtract Benefits Paid: $72,000**Calculation:**\[ 450,000 + 100,

Plan assets are the fund collected from the contribution of employee and employer for discharging…

Sony, Inc.'s defined benefit pension plan reported the following information for 2021: Projected Benefit Obligation, January 1 $500,000 Service cost $35,000 Interest cost $40,000 Benefits paid to retirees $72,000 Plan assets, January 1 $450,000 Annual contribution to plan assets $100,000 Actual return on plan assets $33,000 Expected return on plan assets 10% What is the value of Sony's plan assets at December 31, 2021? Multiple Choice $511,000 $523,000 $595,000 $583,000

Sony, Inc.'s defined benefit pension plan reported the following information for 2021: Projected Benefit Obligation, January 1 $500,000 Service cost $35,000 Interest cost $40,000 Benefits paid to retirees $72,000 Plan assets, January 1 $450,000 Annual contribution to plan assets $100,000 Actual return on plan assets $33,000 Expected return on plan assets 10% What is the value of Sony's plan assets at December 31, 2021? Multiple Choice $511,000 $523,000 $595,000 $583,000

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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