Reference no: EM132883168
Question - Data regarding the defined benefit plan of Po Company follow:
Fair value of plan assets, Jan. 1 2,500,000
Return on plan assets 600,000
Contributions to the fund 800,000
Present value of defined benefit obligation, Jan. 1 2,000,000
Current service cost 1,000,000
Benefits paid during the period 300,000
Discount rate 10%
Settlement price of DBO 60,000
PV of DBO settled 25,000
1. How much is the net benefit asset (or liability) to be recognized in the statement of financial position on January 1 of the current year?
a. (2,000,000)
b. 2,500,000
c. 500,000
d. 665,000
2. How much is the net benefit asset (or liability) to be recognized in the statement of financial position on December 31 of the current year?
a. (2,875,000)
b. 500,000
c. 665,000
d. 3,540,000