Puhlman Inc. provides a defined benefit pension plan to its employees. It smooths recognition of its gains and losses when computing its market-related value to compute expected return. Additional information follows:
December 31, | ||||||||||||
Description | 2017 | 2016 | ||||||||||
PBO | ? | $ | 2,500,000 | |||||||||
ABO | $ | 2,335,000 | 2,150,000 | |||||||||
Fair value of plan assets | ? | 2,100,000 | ||||||||||
Market-related value of plan assets (smoothed recognition) | 2,342,800 | 2,100,000 | ||||||||||
Benefit payments made | 272,000 | 231,000 | ||||||||||
AOCI—net actuarial (gain) loss | 114,000 | -0- | ||||||||||
AOCI—prior service cost | ? | 400,000 | ||||||||||
Balance sheet pension asset (liability) | ? | (400,000 | ) | |||||||||
Service cost | 214,000 | |||||||||||
Contribution | 321,000 | |||||||||||
Actual return | 129,000 | |||||||||||
Discount rate for PBO | 9 | % | 10 | % | ||||||||
Expected rate of return | 10 | % | 10 | % | ||||||||
Average remaining service life of employees | 15 years | 15 years | ||||||||||
During 2017, the PBO increased by $33,000 due to a decrease in the discount rate from the previous year. The 2016 discount rate assumption was used to compute 2017 service cost and interest cost.
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Round all amounts to the nearest dollar:
Puhlman Inc. provides a defined benefit pension plan to its employees. It smooths recognition of its...
Puhlman Inc. provides a defined benefit pension plan to its employees. It smooths recognition of its gains and losses when computing its market-related value to compute expected return. Additional information follows: December 31, Description 2017 2016 PBO ? $ 2,500,000 ABO $ 2,335,000 2,150,000 Fair value of plan assets ? 2,100,000 Market-related value of plan assets (smoothed recognition) 2,342,800 2,100,000 Benefit payments made 272,000 231,000 AOCI—net actuarial (gain) loss 114,000 -0- AOCI—prior service cost ? 400,000 Balance sheet pension asset...
Turner Inc. provides a defined benefit pension plan to its employees. The company has 150 employees. The remaining amortization period at December 31, 2016, for prior service cost is 5 years. The average remaining service life of employees is 11 years at January 1, 2017, and 10 years at December 31, 2017. The AOCI—net actuarial (gain) loss was zero at December 31, 2016. Turner smooths recognition of its gains and losses when computing its market-related value to compute expected return....
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Part IV: Watt Inc. sponsors a defined benefit pension plan for its employees. On January 1, 2017, the following balances relate to this plan. Plan assets 4,316,000 Projected benefit obligation 4,300,000 Prior service cost (OCT) 840,000 Accumulated OCI - Loss 656,000 As a result of the operation of the plan during 2017, the following additional data are provided by the actuary. Service cost for 2017 523,000 Settlement & expected return rate 10% Actual return on planets 510,000 Average service life...
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