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    Actual return and unexpected gain on plan assets

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    R25). Use the following information for questions I through III below.

    The following data are for the pension plan for the employees of Nickels Company.
    ....................................................... 1/1/07..... 12/31/07..... 12/31/08
    Accumulated benefit obligation $7,500,000 $7,800,000 $10,200,000
    Projected benefit obligation........ 8,100,000.. 8,400,000.. 11,100,000
    Market-related asset value........ 6,600,000.. 8,700,000.... 9,300,000
    Plan assets (at fair value).......... 6,900,000.. 9,000,000.... 9,900,000
    Accumulated OCI-Loss................... -0-........ 1,440,000..... 1,500,000
    Settlement rate (for year)................................... 10%........... 9%
    Expected rate of return (for year)...................... 8%............. 7%

    Nickels' contribution was $1,260,000 in 2008 and benefits paid were $1,125,000. Nickels estimates that the average remaining service life is 15 years.

    I. The actual return on plan assets in 2008 was

    a. $900,000.
    b. $765,000.
    c. $600,000.
    d. $465,000.

    II. The actual return on plan assets in 2008 was $765,000. The unexpected gain on plan assets in 2008 was

    a. $156,000.
    b. $135,000.
    c. $114,000.
    d. $72,000.

    III. The corridor for 2008 was $870,000. The amount of Accumulated OCI-Loss amortized in 2008 under the corridor method was

    a. $100,000.
    b. $96,000.
    c. $42,000.
    d. $38,000.

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    https://brainmass.com/business/accounting/actual-return-and-unexpected-gain-on-plan-assets-261953

    Solution Preview

    1. Actual return on plan assets is
    Change in plan assets (9,900,000-9,000,000) 900,000
    Less: ...

    Solution Summary

    The solution explains how to calculate actual return and unexpected gain on plan assets

    $2.19

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