Compute pension expense for 2009

Reference no: EM131514126

Determining pension expense and AOCI balances

Cummings, Inc. had the following reconciliation at December

Determining pension expense and AOCI balances

Fair value of plan assets	$5,000
PBO	4,200
Funded status	$800
AOCI-prior service cost $300
AOCI-net actuarial (gain) loss	700
Total	$1,000

The following assumptions are being used for the pension plan in 2009:

Discount rate	5%
Expected rate of return on assets	8%
Average remaining worklife	10 years
Remaining amortization period for prior services costs	6 years

Additional 2009 Information:

Service cost	$442
Cash contributed to the plan (year-end)	250
Pension benefits paid by the plan (year-end)	465
Actual return on plan assets	650
New actuarial (gain) loss on the PBO	64

Required:

1. Compute pension expense for 2009.

2. Compute the fair value of plan assets at December 31, 2009.

3. Compute the PBO at December 31, 2009.

4. Compute AOCI-net actuarial (gain) loss as of December 31, 2009.

Reference no: EM131514126

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