Reference no: EM131264365
1. On January 1, 20X2, Jeff Co.’s defined benefit pension plan had plan assets with a fair value of $750,000, and a projected plan obligation of $875,000. In addition:
Actual and expected return on plan assets – 7%
Interest cost – 9%
Service costs - $24,000
Unamortized prior service cost - $120,000
Employer contributions to the plan - $45,000
Distributions to employees from the plan - $60,000
Assume that pension expense is $80,000, what will be the amount in plan assets at December 31, 20X2?
a.$735,000
b. $795,000
c. $787,500
d. $708,750
2. According to FASB ASC 715 (SFAS 158), an employer sponsoring a defined benefit pension plan must report a liability on the balance sheet equal to
a. The difference between the accumulated benefit obligation and the projected benefit obligation.
b. The difference between the fair value of plan assets less the projected benefit obligation.
c. The difference between the fair value of plan assets less the accumulated benefit obligation.
d. The current year pension cost that was not funded.
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