Solution-Determine the projected benefit obligation

Determine the projected benefit obligation

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Reference no: EM132031240

Problem - Llano, Inc. started a pension plan on January 1, 2014. At that date, prior to service cost was granted to employees. The following information was available about the plans for 2014 and 2015.

	2014	2015
Service Cost	$100,000	$110,000
Employer contributions at end of year	120,000	123,000
Discount rate	5%	5%
Expected annual return on plan asset	8%	8%
Prior service cost granted on January 1, 2014	220,000	0
Average remaining service life	10 years	10 years

Required:

a) Compute the pension expense for 2014 and 2015.

b) Prepare appropriate journal entries for 2014 only.

c) Determine the Projected Benefit Obligation (PBO), the fair value of plan assets, and the funded status of the plan at December 31, 2014.

Reference no: EM132031240

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Determine the projected benefit obligation

Reference no: EM132031240

Reference no: EM132031240

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