Dell Company adopted a defined benefit pension plan on January 1, 2014 Dell amortizes the initial prior service cost of $1,334,400 over 16 years It assumes a 7 discount rate and an 8 expected rate of return The following additional data are available for 2014 Service cost for 2014 $320,000 Prior se...

The amount on the balance sheet is the funded status The e ...

Dell Company adopted a defined benefit pension plan on January 1, 2014. Dell amortizes the initial prior

Question:

Dell Company adopted a defined benefit pension plan on January 1, 2014. Dell amortizes the initial prior service cost of $1,334,400 over 16 years. It assumes a 7% and an 8% expected rate of return. The following additional data are available for 2014:
Service cost for 2014 .......... $320,000
Prior service cost amortization ....... 83,400
Employer contribution made at 12/31/14 . 335,000

Required:
Compute the pension asset (liability) to be reported on Dell’s December 31, 2014, balance sheet.

Discount Rate
Depending upon the context, the discount rate has two different definitions and usages. First, the discount rate refers to the interest rate charged to the commercial banks and other financial institutions for the loans they take from the Federal...