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Problem:

Stanley-Morgan Industries adopted a defined benefit pension plan on April 12, 2013. The provisions of the plan were not made retroactive to prior years. A local bank, engaged as trustee for the plan assets, expects plan assets to earn a 10% rate of return. A consulting firm, engaged as actuary, recommends 5% as the appropriate discount rate. The service cost is $240,000 for 2013 and $330,000 for 2014. Year-end funding is $250,000 for 2013 and $260,000 for 2014. No assumptions or estimates were revised during 2013.

Required:

Question: Calculate each of the following amounts as of both December 31, 2013, and December 31, 2014

Projected benefit obligation
Plan assets
Pension expense
Net pension asset or net pension liabilty

Note: Be sure to show how you arrived at your answer.

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Accounting Basics, Accounting

Category:- Accounting Basics
Reference No.:- M91164410

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