Pension Acctg

Question 1

report a liability relating to the pension plan of

Answer 1

a liability is recognized on the balance sheet if the projected benefit obligation exceeds the fair value of plan assets.

Question 2

Pension expense is calculated as

Answer 2

Service cost + Interest on the PBO - Return on assets + Prior service cost amortization +/- amortization gains/loss (SIRP where R is also reduce)

Question 3

current liability for pensions at 12/31/Y5 consists of the year 5 net pension cost ($190,000), which will not be paid until 2 months after year-enda noncurrent liab for pension exists if:

Answer 3

A noncurrent liability would exist if the projected benefit obligation ($480,000) exceeds the fair value of plan assets ($500,000).