Information for 4, 5and 6. Ellen Industries has a defined benefit pension plan.
ID: 2542787 • Letter: I
Question
Information for 4, 5and 6. Ellen Industries has a defined benefit pension plan. At December 31, 2017, Ellen received the following information: (S in 000s) 2017 2018 PBO Plan assets Prior service cost- AOCI or OC Accum. Benefit Oblig.(ABO) Net Loss-AOCI Beginning balance ($360) 240 200 (300) 100.6 Beginning balance ($429) 300 165 (360) 100 At the end of 2017, Ellen contributed $60 thousand to the pension fund and benefit payments of $27 thousand were made to retirees. The expected rate of return on plan assets was 11%, and the actuary's discount rate is 10%. There were no changes in actuarial estimates and assumptions regarding the PBO. 4. What is the 2017 service cost for Havana's plan? a. $360 thousand. b. $69 thousand. c. $60 thousand. 5. What is Havana's 2017 actual return on plan assets? a. $0. b. $26.4 thousand. c. $240 thousand. d. $27 thousand. 6. What is Havana's 2017 actuarial gain or loss on plan assets? a. $O b. $26.4 thousand gain. c. $27 thousand loss. d. $0.6 thousand gain.Explanation / Answer
4. Answer is c.
Working:
5. Answer is d
Working:
Beginning PBO A -360000 Interest Cost (10% of $360,000) B -36000 Benefits Paid C 27000 Ending Balance of PBO (A+B+C) D -369000 Actual ending PBO balance E -429000 Service Cost (D - E) F 60000