Question

The following information pertains to Havana Corporation's defined benefit pension plan: ($ in thousands) 2021 Beginning...

The following information pertains to Havana Corporation's defined benefit pension plan:

($ in thousands) 2021
Beginning balances
2022
Beginning balances
Projected benefit obligation $ (7,500 ) $ (8,004 )
Plan assets 7,200 7,836
Prior service cost–AOCI 750 700
Net loss–AOCI $ 870 $ 950


At the end of 2021, Havana contributed $755 thousand to the pension fund and benefit payments of $744 thousand were made to retirees. The expected rate of return on plan assets was 10%, and the actuary's discount rate is 7%. There were no changes in actuarial estimates and assumptions regarding the PBO.

What is the 2021 pension expense for Havana’s plan?

Multiple Choice

  • $735 thousand.

  • $593 thousand.

  • $688 thousand.

  • None of these are correct.

Homework Answers

Answer #1

Answer :-  Option B) $593 Thousand is correct answer

Explanation:-

Working Notes:-

Let actual return be x.

Ending balance of plan assets = Beginning balance of plan asset + Actual return + Cash Contributions - Retiree benefits

$7,836 = $7200 + x + $755 - $744

x = $7,836- $7,200 - $755 + $744

x= $625

Actual return = $625 thousand

Loss on plant Assets = (7200*10%)

= 720-625

= 95***

Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
The following information pertains to Havana Corporation's defined benefit pension plan: ($ in thousands) 2021 Beginning...
The following information pertains to Havana Corporation's defined benefit pension plan: ($ in thousands) 2021 Beginning balances 2022 Beginning balances Projected benefit obligation $ (7,500 ) $ (8,004 ) Plan assets 7,200 7,836 Prior service cost–AOCI 750 700 Net loss–AOCI $ 870 $ 950 At the end of 2021, Havana contributed $755 thousand to the pension fund and benefit payments of $744 thousand were made to retirees. The expected rate of return on plan assets was 10%, and the actuary's...
The following information pertains to Havana Corporation's defined benefit pension plan: ($ in thousands) 2021 Beginning...
The following information pertains to Havana Corporation's defined benefit pension plan: ($ in thousands) 2021 Beginning balances 2022 Beginning balances Projected benefit obligation $ (7,900 ) $ (8,404 ) Plan assets 7,600 8,236 Prior service cost–AOCI 790 730 Net loss–AOCI $ 910 $ 980 At the end of 2021, Havana contributed $742 thousand to the pension fund and benefit payments of $784 thousand were made to retirees. The expected rate of return on plan assets was 10%, and the actuary's...
Beale Management has a noncontributory, defined benefit pension plan. On December 31, 2021 (the end of...
Beale Management has a noncontributory, defined benefit pension plan. On December 31, 2021 (the end of Beale's fiscal year), the following pension-related data were available: Projected Benefit Obligation ($ in millions) Balance, January 1, 2021 $ 720 Service cost 74 Interest cost, discount rate, 5% 36 Gain due to changes in actuarial assumptions in 2021 (20 ) Pension benefits paid (36 ) Balance, December 31, 2021 $ 774 Plan Assets ($ in millions) Balance, January 1, 2021 $ 800 Actual...
Beale Management has a noncontributory, defined benefit pension plan. On December 31, 2021 (the end of...
Beale Management has a noncontributory, defined benefit pension plan. On December 31, 2021 (the end of Beale's fiscal year), the following pension-related data were available: Projected Benefit Obligation ($ in millions) Balance, January 1, 2021 $ 520 Service cost 54 Interest cost, discount rate, 5% 26 Gain due to changes in actuarial assumptions in 2021 (10 ) Pension benefits paid (26 ) Balance, December 31, 2021 $ 564 Plan Assets ($ in millions) Balance, January 1, 2021 $ 540 Actual...
The following pension-related data pertain to Metro Recreation's noncontributory, defined benefit pension plan for 2018: ($...
The following pension-related data pertain to Metro Recreation's noncontributory, defined benefit pension plan for 2018: ($ in 000s) Jan. 1 Dec. 31 Projected benefit obligation $ 5,200 $ 5,480 Accumulated benefit obligation 3,770 4,060 Plan assets (fair value) 6,180 6,625 Interest (discount) rate, 8% Expected return on plan assets, 10% Prior service cost?AOCI (from Dec. 31, 2017, amendment) 950 Net loss?AOCI 638 Average remaining service life: 10 years Gain due to changes in actuarial assumptions 60 Contributions to pension fund...
The funded status of Hilton Paneling Inc.'s defined benefit pension plan and the balances in prior...
The funded status of Hilton Paneling Inc.'s defined benefit pension plan and the balances in prior service cost and the net gain–pensions, are given below. ($ in 000s) 2018 2018 Beginning Balances Ending Balances Projected benefit obligation $ 3,600 $ 3,801 Plan assets 3,700 4,021 Funded status 100 220 Prior service cost–AOCI 420 350 Net gain–AOCI 410 355 Retirees were paid $257,000 and the employer contribution to the pension fund was $258,000 at the end of 2018. The expected rate...
Herring Wholesale Company has a defined benefit pension plan. On January 1, 2021, the following pension...
Herring Wholesale Company has a defined benefit pension plan. On January 1, 2021, the following pension related data were available: ($ in thousands) Net gain–AOCI $350 Accumulated benefit obligation 3,170 Projected benefit obligation 3,200 Fair value of plan assets 2,700 Average remaining service period of active employees (expected to remain constant for the next several years) 15 years The rate of return on plan assets during 2021 was 9%, although it was expected to be 10%. The actuary revised assumptions...
The blank company has a defined benefit pension plan. Pension information for the fiscal years of...
The blank company has a defined benefit pension plan. Pension information for the fiscal years of 2024 and 2025 are presented below ($ in millions) Info from by pension actuary Projected benefit obligation as of December 31, 2023 = $1,800 Prior service cost from plan amendment on January 2, 2024 = $400 (straight line amortization for a 10 year average remaining service period) Service cost for 2024 = $520 Service cost for 2025 = $570 Discount rate used by actuary...
Carolina Consulting Company has a defined benefit pension plan. The following pension-related data were available for...
Carolina Consulting Company has a defined benefit pension plan. The following pension-related data were available for the current calendar year: PBO: Balance, Jan. 1 $ 242,000 Service cost 43,000 Interest cost (5% discount rate) 12,100 Gain from changes in actuarial assumptions in 2018 (5,200 ) Benefits paid to retirees (22,000 ) Balance, Dec. 31 $ 269,900 Plan assets: Balance, Jan.1 $ 252,000 Actual return (expected return was $22,700) 20,000 Contributions 37,000 Benefits paid (22,000 ) Balance, Dec. 31 $ 287,000...
Bright Management has a non-contributory, defined benefit pension plan. On December 31, 2018 (the end of...
Bright Management has a non-contributory, defined benefit pension plan. On December 31, 2018 (the end of the company's fiscal year), the following pension-related data were available. - Projected Balance Obligation Balance January 1, 2018. ? Service Cost. 76 Interest Cost (discount rate 6%). 45 Loss (gain) due to changes in actuarial assumptions in 2018. (8) Pension Benefits pad. (40) Balance, December 31, 2018 ? - Plan Assets Balance, January 1, 2018. ? Actual return on plan assets, 5% (loss on...
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT