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E20-6

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Intermediate Accounting (Kieso)
Found in: Page 1164

Short Answer

Gingrich Importers provides the following pension plan information. Fair value of pension plan assets, January 1, 2017 $2,400,000 Fair value of pension plan assets, December 31, 2017 2,725,000 Contributions to the plan in 2017 280,000 Benefits paid retirees in 2017 350,000 Instructions From the data above, compute the actual return on the plan assets for 2017

Retirees are individuals whose employment services have come to an end and are no longer eligible to work in any organization. Organizations pay pensions to these employees after their service.

See the step by step solution

Step by Step Solution

Step 1: Computation of change in funds during the year:

Step 2: Computation of actual return on the plan assets for the year 2017.

Particulars

Amount

Fair value of plan assets at the end

$2,725,000

Less: Fair value of plan assets at the beginning

$2,400,000

Fair value of plan assets

$325,000

Less: Change in funds (Step 1)

$70,000

Actual return on the plan assets for the year 2017

$395,000

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