On January 1, 2020, McGee Co. had the following balances: Projected benefit obligation $6,400,000 Fair value of plan assets 6,000,000 Other data related to the pension plan for 2019: contributions to the plan 400,000 Benefits paid 350,000 On 1/1/2020, prior service cost was granted having a present value of 150,000 Actual return on plan assets 430,000 Settlement rate 9% Expected rate of return 7% Amortized Prior Service cost 40,000 Amortization of net gain 50,000 Service cost 250,000 How much will be reported on the balance sheet as Pension Asset/Liability at year end ? A. $6,480,000 B. $400,000 C. $159,500 D. $559,500

On January 1, 2020, McGee Co. had the following balances: Projected benefit obligation $6,400,000 Fair value of plan assets 6,000,000 Other data related to the pension plan for 2019: contributions to the plan 400,000 Benefits paid 350,000 On 1/1/2020, prior service cost was granted having a present value of 150,000 Actual return on plan assets 430,000 Settlement rate 9% Expected rate of return 7% Amortized Prior Service cost 40,000 Amortization of net gain 50,000 Service cost 250,000 How much will be reported on the balance sheet as Pension Asset/Liability at year end ? A. $6,480,000 B. $400,000 C. $159,500 D. $559,500

On January 1, 2020, McGee Co. had the following balances: Projected benefit obligation $6,400,000 Fair value of plan assets 6,000,000 Other data related to the pension plan for 2019: contributions to the plan 400,000 Benefits paid 350,000 On 1/1/2020, prior service cost was granted having a present value of 150,000 Actual return on plan assets 430,000 Settlement rate 9% Expected rate of return 7% Amortized Prior Service cost 40,000 Amortization of net gain 50,000 Service cost 250,000 How much will be reported on the balance sheet as Pension Asset/Liability at year end ? A. $6,480,000 B. $400,000 C. $159,500 D. $559,500

Intermediate Accounting: Reporting And Analysis

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 6RE

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Question

On January 1, 2020, McGee Co. had the following balances:

Projected benefit obligation $6,400,000

Fair value of plan assets 6,000,000

Other data related to the pension plan for 2019:

contributions to the plan 400,000

Benefits paid 350,000

On 1/1/2020, prior service cost was granted having

a present value of 150,000

Actual return on plan assets 430,000

Settlement rate 9%

Expected rate of return 7%

Amortized Prior Service cost 40,000

Amortization of net gain 50,000

Service cost 250,000

How much will be reported on the balance sheet as Pension Asset/Liability at year end ?

		A. $6,480,000
		B. $400,000
		C. $159,500
		D. $559,500

Definition Definition Financial statement that provides a snapshot of an organization's financial position at a specific point in time. It summarizes a company's assets, liabilities, and shareholder's equity, detailing what the company owns, what it owes, and what is left over for its owners. The balance sheet serves as a crucial tool to assess the financial health and stability of a company, as well as to help management make informed decisions about its future investments and financial obligations.

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