wildhorse, inc. on january 1, 2021 initiated a noncontributory, defined-benefit pension plan that grants benefits to its 95 employees for services rendered in years prior to the adoption of the pension plan. the total expected service-years of the 95 employees who are expected to receive benefits under the plan is 1,140. an actuarial consulting firm has indicated that the present value of the projected benefit obligation on january 1, 2021 ws $5,424,000. On december 31, 2021 the following information was provided concerning the pension plan's operations for its first year. employer's contribution at end of year $1,510,000 service cost $550,000 projected benefit obligation 6,551,600 plan assets (at fair value) 1,570,000 expected return on plan assets 9% settlement rate 8% Compute the pension expense recognized in 2021. assume the prior service cost is amortized over the average remaining service life of the employees.
wildhorse, inc. on january 1, 2021 initiated a noncontributory, defined-benefit pension plan that grants benefits to its 95 employees for services rendered in years prior to the adoption of the pension plan. the total expected service-years of the 95 employees who are expected to receive benefits under the plan is 1,140. an actuarial consulting firm has indicated that the present value of the projected benefit obligation on january 1, 2021 ws $5,424,000. On december 31, 2021 the following information was provided concerning the pension plan's operations for its first year. employer's contribution at end of year $1,510,000 service cost $550,000 projected benefit obligation 6,551,600 plan assets (at fair value) 1,570,000 expected return on plan assets 9% settlement rate 8% Compute the pension expense recognized in 2021. assume the prior service cost is amortized over the average remaining service life of the employees.
Intermediate Accounting: Reporting And Analysis
3rd Edition
ISBN:9781337788281
Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Chapter19: Accounting For Post Retirement Benefits
Section: Chapter Questions
Problem 1E
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wildhorse, inc. on january 1, 2021 initiated a noncontributory, defined-benefit pension plan that grants benefits to its 95 employees for services rendered in years prior to the adoption of the pension plan. the total expected service-years of the 95 employees who are expected to receive benefits under the plan is 1,140. an actuarial consulting firm has indicated that the present value of the projected benefit obligation on january 1, 2021 ws $5,424,000. On december 31, 2021 the following information was provided concerning the pension plan's operations for its first year. employer's contribution at end of year $1,510,000 service cost $550,000 projected benefit obligation 6,551,600 plan assets (at fair value) 1,570,000 expected return on plan assets 9% settlement rate 8% Compute the pension expense recognized in 2021. assume the prior service cost is amortized over the average remaining service life of the employees.
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