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    Projected benefit obligation

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    Exercise E20-19 Projected benefit obligation 930,000
    Accumulated benefit obligation 865,000
    Plan assets (at fair value) 700,000
    Vested benefits 200,000
    Prior service cost not yet recognized in
    pension expense 120,000
    Gains and losses 0

    (a) Present the schedule reconciling the funded status with the asset/liability reported on the balance sheet. Assume no asset or liability existed at the beginning of period for pensions on Jean Burr Company's balance sheet.
    (b) Assume the same facts as in (a) except that Jean Burr Company has an unrecognized loss of $16,000during 2007.
    (c) Explain the rationale for the treatment

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    Solution Preview

    Instructions A
    The following schedule reconciles the funded status of the plan with
    the amount reported in the balance sheet at December 31, 2007

    Projected benefit obligation (930,000)
    Plan assets at fair value 700,000
    Projected benefit obligation in
    excess of ...

    Solution Summary

    The expert examines projected benefit obligation.