Quiz 5

Problem 1: The following information relates to the defined

benefit obligation of the T Company as of January 1, 2019. Problem 3: The following information relates to the defined
Projected benefit obligation 16,150,000 benefit pension plan of L Company for the year ended
Fair value of plan assets 15,135,000 December 31, 2020:
Unrecognized past service cost 1,050,000 Projected benefit obligation, January 1 13,800,000
Actuarial gain or loss 0 Projected benefit obligation, December 31 13,150,000
Pension data for the year 2019 and 2020 follows: Fair value of plan assets, January 1 11,500,000
2019 2020 Fair value of plan assets, December 31 13,600,000
Current service cost 870,000 1,150,000 Past Service Cost, January 1 500,000
Contribution to the plan 1,200,000 1,250,000 Past Service Cost, December 31 1,300,000
Benefits paid to retiree 1,320,000 1,400,000 Contribution to the plan 2,000,000
Actual return on plan assets 263,500 1,800,000 Benefits paid to retirees 1,800,000
Actuarial change increasing PBO 800,000 Actuarial change decrease in PBO 906,000
Settlement rate 11% 11% Expected return on plan assets 14%
Long-term expected rate of 10% 10% Settlement rate 12%
return on plan assets 10. What is the amount of current service cost for 2020?
1. What is the net pension expense for 2019? 11. What is the amount of actual return on plan assets in
2. What is the projected benefit obligation as of 2020?
December 31, 2019? 12. What is the amount of net actuarial gain or loss on
3. What is the prepaid/accrued pension expense on December 31, 2020?
December 31, 2019? 13. What is the amount of prepaid/accrued benefit cost in
4. What is the 2020 net pension expense? 2020?
5. What is the prepaid/ accrued benefit cost on 14. What is the amount of net pension expense in 2020?
December 31, 2020?

Problem 2: You gathered the following information related to J

Company’s defined benefit plan for the year ended December
31, 2020:
 Current service cost of providing benefits for the year
to December 31, 2020, 54,000,000.
 Benefits paid to the retired employees in the year,
55,800,000.
 Contribution paid to the fund, 37,800,000.
 Present value of obligation to provide benefit,
3,960,000,000 at January 1, 2020 and 4,500,000,000.
 Fair value of plan assets, 3,780,000,000 at January 1,
2020 and 4,320,000,000 at December 31, 2020.
 Past service cost, 207,000,000.
 Discount rate 5% in 2020 and 6% in 2021.
 Expected rate of return on plan assets 7% on 2020
and 8% on 2021.
6. What is the amount of prepaid/accrued benefit cost on
January 1, 2020?
7. What is the actuarial gain to be recognized on
December 31, 2020?
8. What is the net pension expense to be recognized for
the year ended December 31, 2020?
9. What is the prepaid/accrued benefit cost on December
31, 2020?