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1. Assume the following data is presented for Oehler Company for the year 2014
Annual service cost for 2014 is $29,000
Settlement rate is 7%;
expected earnings rate is 7%
Actual return on plan assets for 2014 is 28,000
Amortization of PSC in 2014 21,000 Contributions (funding) in 2014 is 32,000
Benefits paid to retirees in 2014 is 20,000
The end-of-year 2014 projected benefit obligation 640,000
Required:
(a) Determine the pension expense for the year 2014
(b) .Determine the beginning of the year projected benefit obligation
this is the solution, how the professor got the numbers
Problem #2
| Annual service cost for 2014 | | $29,000 |
| Settlement rate is 7%; expected earnings rate is 7% | | |
| Actual return on plan assets for 2014 | | 28,000 |
| Amortization of PSC in 2014 | | 21,000 |
| Contributions (funding) in 2014 | | 32,000 |
| Benefits paid to retirees in 2014 | | 20,000 |
| The end-of-year 2014 projected benefit obligation | | 640,000 |
| | | |
| Pension Expense | | |
| Service cost | | 29,000 |
| Interest on PBO | | 41,280 |
| Actual earnings on plan assets | | (28,000) |
| Amort of PSC | | 21,000 |
| Amort of gain/loss | | 0 |
| Total pension expense | | 63,280 |
| | | |
| | | |
| PBO | | |
| Beginning of year | | 589,720 |
| Service cost | | 29,000 |
| Interest on PBO (BOY * .07) | | 41,280 |
| Benefits paid | | (20,000) |
| End of year | | 640,000 |
Answer & Explanation
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