Jones Manufacturing Inc. sponsored a defined benefit pension plan effective 1 January 20X7. The company uses the projected unit credit actuarial cost method for funding and accounting. Long-term corporate bonds have a yield of 4%. Employees were granted partial credit for past service. The past service obligation has been measured at $1,650,000 as of 1 January 20X7. The company will pay $204,000 (for past service) plus all current service cost to the pension plan trustee each 31 December beginning 31 December 20X7. This funding arrangement will continue for five years and then be re-evaluated. Data for 20X7 and 20X8 Current service cost Actual return on fund assets Decrease in defined benefit obligation at year-end due to change in assumptions Payments to pensioners at end of year Required: Prepare a spreadsheet containing all 29X7 $119,000 20x8 $161,000 7,000 39,000 42,400 pension information for 20X7 and 20X8

Jones Manufacturing Inc. sponsored a defined benefit pension plan effective 1 January 20X7. The company uses the projected unit credit actuarial cost method for funding and accounting. Long-term corporate bonds have a yield of 4%. Employees were granted partial credit for past service. The past service obligation has been measured at $1,650,000 as of 1 January 20X7. The company will pay $204,000 (for past service) plus all current service cost to the pension plan trustee each 31 December beginning 31 December 20X7. This funding arrangement will continue for five years and then be re-evaluated. Data for 20X7 and 20X8 Current service cost Actual return on fund assets Decrease in defined benefit obligation at year-end due to change in assumptions Payments to pensioners at end of year Required: Prepare a spreadsheet containing all 29X7 $119,000 20x8 $161,000 7,000 39,000 42,400 pension information for 20X7 and 20X8

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 4C

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