Prepare the note disclosure necessary to reconcile

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Reconciliation of Beginning and Ending Pension Fund Balances

Refer to Practice 17-19. Prepare the note disclosure necessary to reconcile the beginning balance in the pension fund and the ending balance in the pension fund.

Reconciliation of Beginning and Ending PBO Balances

On January 1 of Year 1, the company had a projected benefit obligation (PBO) of $10,000 and a pension fund with a fair value of $9,200.Unrecognized prior service cost was $2,000; it was being amortized on a straight-line basis over the 5-year average remaining life of the affected employees. The balance in the unrecognized (or deferred) pension gain was $700. The following information relates to the pension plan during the year:

Service cost                                                                   

$1,200

Actual return on the pension fund                                                   

$1,550

Benefits paid to retirees                                                          

$300

Contribution to the pension fund                                                   

$1,050

Discount rate for PBO                                                            

8%

Expected return on pension fund                                                    

11%

Prepare the note disclosure necessary to reconcile the beginning balance in the PBO and the ending balance in the PBO.

Reference no: EM13553471

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