Reference no: EM132489373
Question 1: Carla Vista Company has a defined-benefit plan. At the end of 2018, it has determined the following information related to its pension plan:
Projected benefit obligation $1210000
Accumulated benefit obligation 1075000
Fair value of pension plan assets 980000
The amount of pension liability that is reported in Carla Vista's balance sheet at the end of 2018 is
- $230000.
- $135000.
- $95000.
- $365000.
Question 2: Pharoah Corp., a company whose stock is publicly traded, provides a noncontributory defined-benefit pension plan for its employees. The company's actuary has provided the following information for the year ended December 31, 2018:
Projected benefit obligation $658000
Accumulated benefit obligation 481000
Fair value of plan assets 780000
Service cost 200000
Interest on projected benefit obligation 16000
Amortization of prior service cost 44000
Expected and actual return on plan assets 58500
The market-related asset value equals the fair value of plan assets. No contributions have been made for 2018 pension cost. In its December 31, 2018 balance sheet, Pharoah should report a pension asset / liability of
- Pension liability of $658000
- Pension asset of $780000
- Pension asset of $122000
- Pension liability of $481000