ex 19 81 pension asset terminology discuss the following ideas related to pension as 4314575

ex 19 81 pension asset terminology discuss the following ideas related to pension as 4314575

Ex. 19-81Pension asset terminology

Discuss the following ideas related to pension assets:

a)Actual return on plan assets

b)Expected return on plan assets

c)Unexpected gains and losses on plan assets

Ex. 19-82Pension plan calculations

The following information relates to the defined benefit pension plan for Strawberry Dale Ltd.:

Dec 31/16 Dec 31/17

Defined benefit obligation$2,250,000$3,000,000

Fair value of plan assets 2,300,000 2,640,000

Interest rate 8%8%

Expected rate of return7%6%

In 2017, the corporation contributed $390,000 to the plan, and the trustee paid $210,000 in benefits to retirees.

Instructions

For the year ended December 31, 2017

a)Calculate the interest on the obligation.

b)Calculate the actual return on plan assets.

c)Calculate the unexpected gain or loss (if any).

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