pensiondemoFall2010 - 21,000 *as of 1/1/09. FACTS AND...

Info iconThis preview shows page 1. Sign up to view the full content.

View Full Document Right Arrow Icon
Pension Worksheet Demo ABC Company established a defined benefit pension plan on January 1, 2008. An actuarial valuation determined that the pension benefit obligation as of that date was $200,000, this was considered the amount for past service to that point. There was no initial funding, but the Company funded an excess amount during 2008. Details of the plan over the first three years are as follows: 2008 2009 2010 Annual current service cost 16,000 19,000 26,000 Actual return on assets 18,000 22,000 24,000 Interest rate 8% 8% 8% Expected asset earnings rate 10% 10% 10% Contributions to plan 216,000 40,000 48,000 Payment to retirees 14,000 16,000
Background image of page 1
This is the end of the preview. Sign up to access the rest of the document.

Unformatted text preview: 21,000 *as of 1/1/09. FACTS AND ASSUMPTIONS Expected period to full eligibility of employees is 10 years for all years. Past service costs are not vested for 10 years. Contributions to the plan, as well as payments to retirees, are made evenly over the year. Current service cost is deemed to be effective as at the beginning of each year. The Company elects to use the corridor method and therefore not recognize gains and losses through Other Comprehensive income/ An actuarial valuation resulted in a pension plan liability of $520,000 as of 31/12/2010. REQUIRED : Prepare pension worksheets and related journal entries for the 3 year period....
View Full Document

Ask a homework question - tutors are online