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Question
The Hab Company provided the following information pertaining to its defined benefit pension plan for 2012:
The projected benefit obligation as of January 1, 2012 was $6,250,000.
The settlement/discount rate was 8%.
The service cost was $300,000.
The amortization of prior service cost was $100,000.
The expected return on plan assets was 10%.
The actual return on plan assets was $800,000.
The fair value of plan assets on January 1, 2012 was $5,000,000.
Pension payments to retirees during the year totaled $250,000.
Contributions to the pension plan totaled $200,000.
Amortization of unrecognized net actuarial losses totaled $125,000.
Required:
1. Determine the pension expense for 2012.
2. Determine the projected benefit obligation as of December 31, 2012.
3. Determine the fair value of plan assets as of December 31, 2012.
4. Determine the pension liability to be reported on the December 31, 2012 balance sheet.
Answer
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