Question

The following information for Cooper Enterprises is given below. There were no actuarial gains or losses at January 1, 2015. The average remaining service life of employees is 10 years. What is the amount that Cooper Enterprises should report as its pension liability on its balance sheet as of December 31, 2015? ACC660 PQ7 Key_v3 Prob 13.PNG

December 31, 2015 $400,000 740,000 800,000 Assets and obligations Plan assets (at fair value) Accumulated benefit obligation Projected benefit obligation Other Items Pension asset/ liability, January 1, 2015 Contributions Accumulated other comprehensive loss 20,000 240,000 335,800

Answer 1

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solution: pension Liability. as of Dec 31, 2015 - $ 400,000 Explanations ... A Pension Liability is reported when the projected Benefit obligation exceeds the pension Plan assetstat fair value), le pension projected plan Assets = Benefit.. - (at fair value) Liability obligation In the present case, Cooper Enterprises projected Benefit obligation exceeds the plain assots (at fair value). Therefore it has to report a pension Liability on its balance sheed as of December 31, 2015 OF $400,000 ($800.000 = $400.000)