Projected benefit obligation Fair value of plan assets $4,500,000 4,200,000 The interest (settlement) rate applicable to the plan is 10%. On January 1, 2018, the company amends its pension agreement so that prior service costs of $500,000 are created. Other data related to the pension plan are as follows. 2017 2018 Service cost $150,000 $180,000 90,000 285,000 280,000 260,000 8% Prior service cost amortization -0- Contributions (funding) to the plan Benefits paid Actual return on plan assets Expected rate of return on assets 240,000 200,000 252,000 6%

Projected benefit obligation Fair value of plan assets $4,500,000 4,200,000 The interest (settlement) rate applicable to the plan is 10%. On January 1, 2018, the company amends its pension agreement so that prior service costs of $500,000 are created. Other data related to the pension plan are as follows. 2017 2018 Service cost $150,000 $180,000 90,000 285,000 280,000 260,000 8% Prior service cost amortization -0- Contributions (funding) to the plan Benefits paid Actual return on plan assets Expected rate of return on assets 240,000 200,000 252,000 6%

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter19: Accounting For Post Retirement Benefits

Section: Chapter Questions

Problem 6RE

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