PROBLEM 1 - McCaw Company provides the following information about its defined-benefit pension plan for the year 2011.
Service cost $210,000
Contribution to the plan 263,000
Prior service cost amortization 35,000
Actual and expected return on plan assets 123,000
Benefits paid 220,000
Plan assets at January 1, 2011 1,440,000
Projected benefit obligation at January 1, 2011 1,800,000
Accumulated OCI (PSC) at January 1, 2011 325,000
Interest/discount (settlement) rate 9%
Instruction: Compute the pension expense for the year 2011.
PROBLEM 2 - Ace Inc. has five employees participating in its defined-benefit pension plan. Expected years of future service for these employees at the beginning of 2010 are as follows.
Employee Future Years of Service
Jane 6
John 1
Jimmy 3
Jenny 6
Jerry 4
On January 1, 2010, the company amended its pension plan increasing its projected benefit obligation by $210,000.
Instruction: Compute the amount of prior service cost amortization for the years 2010 through 2015 using the years-of-service method setting up appropriate schedules.
PROBLEM 3 - Hunt Syrups Company provides the following pension plan information.
Fair value of pension plan assets, January 1, 2010 $1,250,000
Fair value of pension plan assets, December 31, 2010 1,460,000
Contributions to the plan in 2010 160,000
Benefits paid retirees in 2010 206,000
Instruction: From the data above, compute the actual return on the plan assets for 2010.
PROBLEM 4 - Banc Six Corp. provides the following information related to its postretirement benefits for the year 2011.
Accumulated postretirement benefit obligation at January 1, 2011 $1,195,000
Actual and expected return on plan assets 2,500
Unrecognized prior service cost amortization 105,000
Discount rate 8%
Service cost 121,000
Instruction: Compute postretirement benefit expense for 2011.