Intermediate Accounting: P17-6 Stanley-Morgan Industries adopted a defined beneft pension plan

Intermediate Accounting

Problem 17-6 Determine the PBO; plant assets; pension expense; two years
Stanley-Morgan Industries adopted a defined benefit pension plan on April 12, 2009. The provision of the plan were not made retroactive to prior years. A local bank, engaged as trustee for the plant assets, expects plan assets to earn a 10% rate of return. A consulting firm, engaged as actuary, recommends 6% as the appropriate discount rate. The service cost is $150,000 for 2009 and $200,000 for 2010. Year-end funding is $160,000 for 2009 and $170,000 for 2010. No assumption or estimates were revised during 2009.

Required:
Calculate each of the following amounts as of both December 31, 2009, and December 31, 2010.
1. Projected benefit obligation
2. Plan assets
3. Pension expense
4. Net pension asset/liability
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