Sunshine Ltd. had service and interest costs of $60,000 related to its defined benefit pension plan for the year ended December 31, Year 8. The company's unrecognized prior service cost was $150,000 at December 31, Year 7, and the average remaining service life of the company's employees was 15 years. Plan assets earned an expected and actual return of 8% during Year 8. The company made contributions to the plan of $40,000 and paid benefits of $50,000 during the year. The pension plan had plan assets with a fair value of $350,000 at December 31, Year 7. The PBO was $500,000 at December 31, Year 7, and $530,000 at December 31, Year 8. Sunshine Ltd.'s expected tax rate is 25%. What is the funded status of Sunshine Ltd.'s pension plan at December 31, Year 8?

Sunshine Ltd. had service and interest costs of $60,000 related to its defined benefit pension plan for the year ended December 31, Year 8. The company's unrecognized prior service cost was $150,000 at December 31, Year 7, and the average remaining service life of the company's employees was 15 years. Plan assets earned an expected and actual return of 8% during Year 8. The company made contributions to the plan of $40,000 and paid benefits of $50,000 during the year. The pension plan had plan assets with a fair value of $350,000 at December 31, Year 7. The PBO was $500,000 at December 31, Year 7, and $530,000 at December 31, Year 8. Sunshine Ltd.'s expected tax rate is 25%. What is the funded status of Sunshine Ltd.'s pension plan at December 31, Year 8?

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter19: Accounting For Post Retirement Benefits

Section: Chapter Questions

Problem 7RE

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