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.
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).