PROBLEM # 1 McCaw Company provides the following information about its defined-benefit pension plan for the year 2011. Service cost $210,000 Contribution to the plan 263,000 Prior se

PROBLEM # 1

McCaw Company provides the following information about its defined-benefit pension plan for the year 2011.

Service cost

$210,000

Contribution to the plan

263,000

Prior service cost amortization

35,000

Actual and expected return on plan assets

123,000

Benefits paid

220,000

Plan assets at January 1, 2011

1,440,000

Projected benefit obligation at January 1, 2011

1,800,000

Accumulated OCI (PSC) at January 1, 2011

325,000

Interest/discount (settlement) rate

9%

Instruction: Compute the pension expense for the year 2011.

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CHAPTER 20 ASSIGNMENT
PROBLEM # 1
McCaw Company provides the following information about its defined-benefit pension plan for the year 2011.
Service cost
$210,000
Contribution to the plan
263,000
Prior service cost amortization
35,000
Actual and expected return on plan assets
123,000
Benefits paid
220,000
Plan assets at January 1, 2011
1,440,000
Projected benefit obligation at January 1, 2011
1,800,000
Accumulated OCI (PSC) at January 1, 2011
325,000
Interest/discount (settlement) rate
9%
Instruction:
Compute the pension expense for the year 2011.
PROBLEM # 2
Ace Inc. has five employees participating in its defined-benefit pension plan. Expected years of future service for
these employees at the beginning of 2010 are as follows.
Future Years
Employee
of Service
Jane
6
John
1
Jimmy
3
Jenny
6
Jerry
4
On January 1, 2010, the company amended its pension plan increasing its projected benefit obligation by $210,000.
Instruction:
Compute the amount of prior service cost amortization for the years 2010 through 2015 using the
years-of-service method setting up appropriate schedules.
PROBLEM # 3
Hunt Syrups Company provides the following pension plan information.
Fair value of pension plan assets, January 1, 2010
$1,250,000
Fair value of pension plan assets, December 31, 2010
1,460,000
Contributions to the plan in 2010
160,000
Benefits paid retirees in 2010
206,000
Instruction:
From the data above, compute the actual return on the plan assets for 2010.
PROBLEM # 4
Banc Six Corp. provides the following information related to its postretirement benefits for the year 2011.
Accumulated postretirement benefit obligation at January 1, 2011
$1,195,000
Actual and expected return on plan assets
2,500
Unrecognized prior service cost amortization
105,000
Discount rate
8%
Service cost
121,000
Instruction:
Compute postretirement benefit expense for 2011.

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