The following data pertains to a defined benefit (DB) pension plan: 25,000 10% defined benefit obligation, December 31, 2015 long-term interest rate on corporate bonds past service cost, December 31, 2016, benefits and liability reduced actuarial revaluation, December 31, 2016, change in mortality assumptions, increased liability actual return on plan assets - 2016 fair value of plan assets, December 31, 2015 funding payment at December 31, 2016 benefits paid to retirees 2016 current service cost - 2016 (1,200) 600 2,100 16,000 4,000 2,000 1,900 Required: 1. Calculate the net defined benefit pension asset/liability at December 31, 2015. 2. For December 31, 2016, calculate the defined benefit obligation, fair value of plan assets and the net defined benefit pension asset or liability. 3. Calculate the three pension accounting elements and journal entries for service cost, net interest and revaluations for 2016.

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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The following data pertains to a defined benefit (DB) pension plan:
defined benefit obligation, December 31, 2015
long-term interest rate on corporate bonds
past service cost, December 31, 2016, benefits and
liability reduced
actuarial revaluation, December 31, 2016, change in
mortality assumptions, increased liability
actual return on plan assets - 2016
fair value of plan assets, December 31, 2015
funding payment at December 31, 2016
benefits paid to retirees 2016
current service cost - 2016
25,000
10%
(1,200)
600
2,100
16,000
4,000
2,000
1,900
Required:
1. Calculate the net defined benefit pension asset/liability at December 31, 2015.
2. For December 31, 2016, calculate the defined benefit obligation, fair value of
plan assets and the net defined benefit pension asset or liability.
3. Calculate the three pension accounting elements and journal entries for service
cost, net interest and revaluations for 2016.
Transcribed Image Text:The following data pertains to a defined benefit (DB) pension plan: defined benefit obligation, December 31, 2015 long-term interest rate on corporate bonds past service cost, December 31, 2016, benefits and liability reduced actuarial revaluation, December 31, 2016, change in mortality assumptions, increased liability actual return on plan assets - 2016 fair value of plan assets, December 31, 2015 funding payment at December 31, 2016 benefits paid to retirees 2016 current service cost - 2016 25,000 10% (1,200) 600 2,100 16,000 4,000 2,000 1,900 Required: 1. Calculate the net defined benefit pension asset/liability at December 31, 2015. 2. For December 31, 2016, calculate the defined benefit obligation, fair value of plan assets and the net defined benefit pension asset or liability. 3. Calculate the three pension accounting elements and journal entries for service cost, net interest and revaluations for 2016.
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