Reference no: EM131819970

Problem - Tom Johnson Company sponsors a defined benefit plan for its 100 employees. On December 31, 2015, the company's actuary provided the following information:

1/1/15 12/31/15

Vested Benefit Obligation $1500 $1900

Accumulated Benefit Obligation 1900 2730

Projected Benefit Obligation 2800 3645

Plan Assets (Fair Value) 1700 2620

Pension Asset/Liability 1100 ?

Service Cost for the Year 2015 400

Contributions (Funding 2015) 800

Benefits Paid in 2015 200

OCI (G/L) Balance -0- ?

Settlement Rate and Expected Rate of Return 10%

NOTE: You can use a pension worksheet but you must show your work in the spaces provided on the Exam. Please do not attach a worksheet. Be sure to label all items.

Required:

1. Compute the actual return on plan assets in 2015.

2. Compute the amount of the OCI (G/L) as of 12/31/15.

3. Compute the amount of net gain or loss amortization for 2015 (corridor approach).

4. Compute the pension expense for 2015.