Simple computation of the net pension asset or liability

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Reference no: EM13553656

Simple Computation of the Net Pension Asset or Liability

On January 1 of Year 1, the company had a projected benefit obligation (PBO) of $10,000 and a pension fund with a fair value of $9,200. There was no unrecognized prior service cost, nor were there deferred pension gains or losses. The following information relates to the pension plan during the yea

Service cost                                                                   

$1,200

Actual return on the pension fund                                                   

$250

Benefits paid to retirees                                                          

$100

Contribution to the pension fund                                                   

$1,050

Discount rate for PBO                                                            

9%

Expected return on pension fund                                                    

10%

Compute (1) the pension-related amount that should be reported on the company's balance sheet on January 1 of Year 1, (2) the PBO as of December 31, and (3) the fair value of the pension fund as of December 31.

Reference no: EM13553656

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