FS LTD. has a defined benefit pension plan. As at 31 December 2018, its plan assets had a book value of Shs. 140 million and a fair value of Shs. 160 million. The PBO at the time was Shs. 150 million. During the year, the company contributed an amount of Shs. 20 million to the fund, the fund paid out Shs. 15 million while the return on plan assets was Shs. 10 million. Service costs were Shs. 30 million, interest cost amounted to Shs. 12 million while actuarial gains were Shs. 3 million. Required: I) Fair value of plan assets as at 31 December 2019. ii) The projected plan obligation as at 31 December 2019.

FS LTD. has a defined benefit pension plan. As at 31 December 2018, its plan assets had a book value of Shs. 140 million and a fair value of Shs. 160 million. The PBO at the time was Shs. 150 million. During the year, the company contributed an amount of Shs. 20 million to the fund, the fund paid out Shs. 15 million while the return on plan assets was Shs. 10 million. Service costs were Shs. 30 million, interest cost amounted to Shs. 12 million while actuarial gains were Shs. 3 million. Required: I) Fair value of plan assets as at 31 December 2019. ii) The projected plan obligation as at 31 December 2019.

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter19: Accounting For Post Retirement Benefits

Section: Chapter Questions

Problem 3RE: Pinecone Company has plan assets of 500,000 at the beginning of the current year and expects to earn...

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Pinecone Company has plan assets of 500,000 at the beginning of the current year and expects to earn 12% on its plan assets during the year. Pinecones service cost is 230,000, and its interest cost is 55,000. Compute Pine-cones pension expense for the current year.
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