Question

On January 1, 2015, Parks Co. has the following balances: Projected benefit obligation                            &

On January 1, 2015, Parks Co. has the following balances:

Projected benefit obligation                                          $4,200,000

Fair value of plan assets                                                   3,480,000

The settlement rate is 10%. Other data related to the pension plan for 2015 are:

Service cost                                                                       $226,000

Amortization of prior service costs                                       54,000

Contributions                                                                      270,000

Benefits paid                                                                       250,000

Actual return on plan assets                                               264,000

Amortization of net gain                                                       18,000

The balance of the projected benefit obligation at December 31, 2015 is

a.   $4,494,000.

b.   $4,596,000.

c.   $4,860,000.

d.   $4,610,000.

The fair value of plan assets at December 31, 2015 is

a.   $3,506,000.

b.   $3,764,000.

c.   $4,034,000.

d.   $4,284,000.

Business   Accounting   
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Homework Answers

Answer #1
1) Balance of the projected benefit obligation at December 15
Projected Benefit obligation 4200000
add: Servive cost 226000
less: Benefit paid 250000
add: Settelement cost ( 4200000*10%) 420000
Projected Benefit obligation 4596000
Option ''B" is correct
2) Fair value of plan assets
Fair value of plan assets 3480000
add: actual return on plan assets 264000
add: Contribution 270000
less: Benefit paid -250000
Fair value of plan assets 3764000
Option " B" is CORRECT
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