Puhlman Inc. provides a defined benefit pension plan to its employees. It smooths recognition of its gains
Question:
During 2017, the PBO increased by $33,000 due to a decrease in the discount rate from the previous year. The 2016 discount rate assumption was used to compute 2017 service cost and interest cost.
Required:
Round all amounts to the nearest dollar:
1. Compute the fair value of plan assets at December 31, 2017.
2. Compute the prior service cost that would be amortized as a component of pension expense for 2017 and 2018.
3. Compute the PBO at December 31, 2017.
4. Compute pension expense for 2017.
5. Prepare the company's required pension journal entries for 2017.
6. Compute the 2017 increase/decrease in AOCI-net actuarial (gains) or losses and the amount to be amortized in 2017 and 2018.
7. Confirm that the pension asset (liability) on the balance sheet equals the funded status as of December 31, 2017.
Step by Step Answer:
Financial Reporting and Analysis
ISBN: 978-1259722653
7th edition
Authors: Lawrence Revsine, Daniel Collins, Bruce Johnson, Fred Mittelstaedt, Leonard Soffer