Duster Corporation is a private enterprise and has a defined benefit pension plan that is accounted for under the immediate recognition approach. The following information is available for Duster Corporation for 2011:
Service cost ……………………………….
$58,000
Interest on ABO, funding
basis …………. 23,000
Expected return on plan
assets ………….. 25,000
Actual return on plan assets
……………… 27,000
Calculate Duster’s 2011
pension expense.
Service
cost $58,000
Interest on
ABO 23,000
Actual return on plan
assets (27,000 )
Pension
expense $54,000
Potter Corporation is a
private enterprise and has elected to use the immediate recognition approach to
account for its defined benefit pension plan. The following information (in
hundreds of thousands of dollars) is available for Potter Corporation for
2011:
Actual return on plan assets
…………………….. 9
Current service cost
……………………………. 19
Benefits paid to retirees
………………………… 10
Interest cost
…………………………………….. 11
Contributions from employer
…………………… 20
Opening balance, ABO,
funding basis …………. 100
Opening balance, fund assets
…………………… 100
At the end of the year,
Potter Corporation revised the terms of its pension plan, which resulted in past
service costs of $35.
Determine the pension
expense that should be reported on Potter Corporation’s December 31, 2011 income
statement.
Interest
cost 11
Current service
cost 19
Actual return on plan
assets (9)
Past cost of plan amendment
in year 35
Pension
expense $56
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