Cummings Inc. had the following reconciliation at December 31, 20X0: Fair value of plan assets $ 5,000

Question:

Cummings Inc. had the following reconciliation at December 31, 20X0:

Fair value of plan assets

$ 5,000

PBO

4,200

Funded status

$ 800

AOCI—prior service cost

$ 300

AOCI—net actuarial loss

700

Total pension AOCI loss

$ 1,000


The following assumptions are being used for the pension plan in 20X1:

Discount rate

5%

Expected rate of return on plan assets

8%

Average remaining work life

10 years

Remaining amortization period for prior service costs

6 years


Additional 20X1 Information:

Service cost

$ 442

Cash contributed to the plan (year-end)

250

Pension benefits paid by the plan (year-end)

465

Actual return on plan assets

673

New actuarial loss on the PBO

64


Required:

1. Compute pension expense for 20X1.

2. Compute the fair value of plan assets at December 31, 20X1.

3. Compute the PBO at December 31, 20X1.

4. Compute AOCI—net actuarial loss as of December 31, 20X1.

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Related Book For  answer-question

Financial Reporting And Analysis

ISBN: 9781260247848

8th Edition

Authors: Lawrence Revsine, Daniel Collins, Bruce Johnson, Fred Mittelstaedt, Leonard Soffer

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