The City of Nomanchester has a defined benefit pension plan for a number of its employees. A pension trust fund has been set up that currently has a net position of $32.7 million because quite a number of investments are being held. An actuary estimates that employees will eventually receive $99.7 million as a result of this pension. However, only $72.4 million of that amount is for past work that has been provided. The present value of the $72.4 million in payments is $49.8 million. On its government-wide financial statements, what amount of net pension liability should be reported? Choose the correct.a. Zerob. $17.1 millionc. $39.7 milliond. $67.0 million
The City of Nomanchester has a defined benefit pension plan for a number of its employees. A pension trust fund has been set up that currently has a net position of $32.7 million because quite a number of investments are being held. An actuary estimates that employees will eventually receive $99.7 million as a result of this pension. However, only $72.4 million of that amount is for past work that has been provided. The present value of the $72.4 million in payments is $49.8 million. On its government-wide financial statements, what amount of net pension liability should be reported? Choose the correct.a. Zerob. $17.1 millionc. $39.7 milliond. $67.0 million
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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The City of Nomanchester has a defined benefit pension plan for a number of its employees. A
pension trust fund has been set up that currently has a net position of $32.7 million because quite a
number of investments are being held. An actuary estimates that employees will eventually receive
$99.7 million as a result of this pension. However, only $72.4 million of that amount is for past work
that has been provided. The present value of the $72.4 million in payments is $49.8 million. On its government-wide financial statements, what amount of net pension liability should be reported? Choose the correct.
a. Zero
b. $17.1 million
c. $39.7 million
d. $67.0 million
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