Question

Stanley-Morgan Industries adopted a defined benefit pension plan on April 12, 2018. The provisions of the plan were not made retroactive to prior years. A local bank, engaged as trustee for the plan assets, expects plan assets to earn a 10% rate of return. The actual return was also 10% in 2018 and 2019.* A consulting firm, engaged as actuary, recommends 5% as the appropriate discount rate. The service cost is $160,000 for 2018 and $210,000 for 2019. Year-end funding is $170,000 for 2018 and $180,000 for 2019. No assumptions or estimates were revised during 2018.

*We assume the estimated return was based on the actual return on similar investments at the inception of the plan and that, since the estimate didn’t change, that also was the actual rate in 2019.

Required:

Calculate each of the following amounts as of both December 31, 2018, and December 31, 2019: (Enter your answers in thousands (i.e., 200,000 should be entered as 200).)

Answer 1

Answer! Given that stanley-morgon industries adpoled - benfit plan on April 12, 2016. a defined * of made The ... Provision retro active to the plan were not Prior year . benefit obligation projected the (1 compuke Amount. C 6ooo's Particulars Balance Janaury 2018 Senive cost Interest Cost (5%. xo) Benefit Paid Balance December 31, 2018 serivee cost . Benefits Paid Balance December 31, 2019

(2) Calculate the plan Assel. Particulars . Balance January 1 2018 Amount Actual return on Plan assets (10%xo) 170 176 Con luributions, 2018 Benefit Paid Balance December 31, 2018 Actual return plan assets . . (109.170) Contributions 2.019 ... Benfit Paid - 180 537 537 (3) Amount calculate the Pension experie Particular service cost 160 Interest.cost (5Yx0) il Exected return on the plan arsley' lroy.xo)

Serive cost In terest cost ( 57.69% . Expected return on the plan - aneh (10r. 190) amel, net. Pension asset . (u) : calculate or liability Amount $000) Particular : . PBO . Plan anets Wet Pension ansion . De cal 2018 PBO Plan aneh Net - Pension liability Dec 3, 2019