question archive The following information relates to the defined benefit pension plan of Orchard Company as of December 31, 2005: Unrecognized net loss from prior years
The following information relates to the defined benefit pension plan of Orchard Company as of December 31, 2005: Unrecognized net loss from prior years
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The following information relates to the defined benefit pension plan of Orchard Company as of December 31, 2005:
Unrecognized net loss from prior years .................
43,000
Market-related value of pension plan assets ............
2,343,000
Accumulated benefit obligation .........................
2,500,000
Unrecognized prior service cost ........................
400,000
Fair value of pension plan assets ......................
2,557,000
Projected benefit obligation ...........................
2,800,000
What amount should be shown on Orchard's December 31, 2005 balance sheet as "Prepaid/Ac- crued Pension Cost?" Clearly indicate whether the amount should be shown as a liability or an as- set.
The following information relates to the defined benefit pension plan of Orchard Company as of December 31, 2005:
|
Unrecognized net loss from prior years ................. |
43,000 |
|
Market-related value of pension plan assets ............ |
2,343,000 |
|
Accumulated benefit obligation ......................... |
2,500,000 |
|
Unrecognized prior service cost ........................ |
400,000 |
|
Fair value of pension plan assets ...................... |
2,557,000 |
|
Projected benefit obligation ........................... |
2,800,000 |
What amount should be shown on Orchard's December 31, 2005 balance sheet as "Prepaid/Ac- crued Pension Cost?" Clearly indicate whether the amount should be shown as a liability or an as- set.
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ANS: |
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Projected benefit obligation ........................... |
$(2,800,000) |
|
Fair value of pension plan assets ...................... |
2,557,000 |
|
Excess of obligation over funding (underfunding) ....... |
$ (243,000) |
|
Unrecognized net loss from prior years ................. |
43,000 |
|
Unrecognized prior service cost ........................ |
400,000 |
|
Prepaid pension cost (an asset) ........................ |
$ 200,000 |
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