19-Solutions to Required p19-9

# 19-Solutions to Required p19-9 - PROBLEM 19-9(a Continuity...

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PROBLEM 19-9 (a) Continuity Schedule of Accrued Benefit Obligation: 2011 2012 2013 Accrued benefit obligation at beginning of year Annual service cost Interest cost Benefits paid out Net actuarial loss (gain) Accrued benefit obligation at end of year \$ 0 55,000 0 a 8,900 ) \$63,900 \$ 63,900 85,000 7,029 b (30,000 ) (24,500 ) ) \$101,429 \$ 101,429 119,000 8,114 c (35,000 ) 84,500 ) \$278,043 a No interest is calculated since there was no obligation at the beginning of the year. b \$7,029 = \$63,900 X 11% c \$8,114 = \$101,429 X 8% (b) Continuity Schedule of Plan Assets: 2011 2012 2013 Plan assets at beginning of year Expected return on assets Net actuarial gain (loss) Benefits paid out Contributions Plan assets at end of year \$ 0 0 a 0 0 50,000 ) \$50,000 \$ 50,000 4,000 b 1,000 c (30,000 ) 60,000 \$85,000 \$ 85,000 6,800 d 18,200 (35,000 ) 95,000 ) \$170,000 a No interest is calculated since there were no plan assets during the year. b \$4,000 = \$50,000 X 8% c \$1,000 = \$85,000 – \$50,000 – \$4,000 – \$60,000 + \$30,000 d \$6,800 = \$85,000 X 8%

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PROBLEM 19-9 (Continued) (c) Pension expense for 2011 consisted only of the service cost component amounting to \$55,000. There were no past service cost, net gain or loss, pension assets, or accrued benefit obligation as of January 1, 2011.
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