Pension Accounting Assignment PDF

Running head: PENSION PLAN ASSETS
Pension Accounting: Pension Plan Assets
Name
Institution

PENSION PLAN ASSETS
E 17–5
Determine pension plan assets
The following data relate to Voltaire Company’s defined benefit pension plan:
Required:
Determine the amount of pension plan assets at fair value on December 31.
$ in Millions
Plan Assets
Beginning of the year 600
Add: Actual return 48
Add: Cash contributions 100
748
Less: Retiree benefits (11)
End of the year 737
The amount of pension plan assets at fair value on December 31 is determined by deducting
the retiree benefits from the sum of plant assets at the beginning of the year, actual returns,
and cash contributions[ CITATION Hol01 \l 1033 ].
E 17–7
Changes in plan assets; determine cash contributions
Pension data for Fahy Transportation Inc. include the following:
Required:

PENSION PLAN ASSETS
Assuming cash contributions were made at the end of the year, what was the amount of those
contributions?
$ in millions
Plan Assets
End of the year 750
Retiree benefits 66
816
Beginning of the year 700
Actual return 77
39
Cash contributions are the funding provided by the employer which based of the service cost,
interest cost, prior service cost, and expected return on plan asset[ CITATION Bre95 \l 1033 ].
Cash contribution is determined by subtracting actual return and beginning plan assets at fair
value on December 31 from the sum of end year plan assets and retiree benefits[ CITATION
Wat131 \l 1033 ]. Actual return is 11% of plan asset as at January.
E 17–10
Determine pension expense
Abbott and Abbott has a noncontributory, defined benefit pension plan. At December 31, 2016,
Abbott and Abbott received the following information:
The expected long-term rate of return on plan assets was 10%. There was no prior service cost
and a negligible net loss–AOCI on January 1, 2016.
Required:
1. Determine Abbott and Abbott’s pension expense for 2016.
$ in millions
Service cost 20
Interest cost 12
32