U.S. Metallurgical Inc. reported the following balances in its financial statements and disclosure notes at December 31, 2015. Plan assets $ 400,000 Projected benefit obligation 320,000 U.S.M.’s actuary determined that 2016 service cost is $60,000. Both the expected and actual rate of return on plan assets are 9%. The interest (discount) rate is 5%. U.S.M. contributed $120,000 to the pension fund at the end of 2016, and retirees were paid $44,000 from plan assets. Required: Determine the following amounts at the end of 2016. 1. Pension expense 2. Projected benefit obligation 3. Plan assets 4. Net pension asset or net pension liability 5. Prepare journal entries to record the pension expense, funding of plan assets, and retiree benefit payments.
U.S. Metallurgical Inc. reported the following balances in its financial statements and disclosure notes at
December 31, 2015.
Plan assets $ 400,000
Projected benefit obligation 320,000
U.S.M.’s actuary determined that 2016 service cost is $60,000. Both the expected and actual
plan assets are 9%. The interest (discount) rate is 5%. U.S.M. contributed $120,000 to the pension fund at the
end of 2016, and retirees were paid $44,000 from plan assets.
Required:
Determine the following amounts at the end of 2016.
1. Pension expense
2. Projected benefit obligation
3. Plan assets
4. Net pension asset or net pension liability
5. Prepare
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