On January 1, 20x1, Valkyrae Company provided the following information in relation to a defined benefit plan:

Fair value of plan assets 6,000,000

Projected Benefit Obligation 5,000,000
Prepaid/accrued benefit cost – surplus 1,000,000
Asset Ceiling 700,000
Effect of Asset Ceiling 300,000

During the current year, the following data are gathered:

Current service cost 700,000
Actual return on plan assets 900,000
Contribution to the plan 1,000,000
Past Service Cost 200,000
Decrease in projected benefit obligation due change in actuarial assumptions 500,000
Asset ceiling on December 31, 20x1 1,200,000
Discount rate 10%

Required:
a. Fair value of plan assets on December 31, 20x1

Fair Value of Plan Assets, beg. 6,000,000

Add: Actual return on plan assets 900,000
Contribution to the plan 1,000,000
Less: Benefits paid 0
Fair value of Plan Assets, end. 7,900,000

b. Projected Benefit Obligation on December 31, 20x1

Project Benefit Obligation, beg. 5,000,000

Add: Interest Expense on PBO 500,000
Service Cost 400,000
Add: Current service cost 700,000
Past Service Cost 200,000

Decrease in projected benefit

obligation due change in
Less: actuarial assumptions 500,000
Less: Benefits Paid 0
Projected Benefit Obligation, end. 5,900,000

c. The effect of asset ceiling on December 31, 20x1

Jan-01 Dec-31
Fair value of plan assets 6,000,000 7,900,000
Projected Benefit Obligation -5,000,000 -5,900,000
Prepaid/accrued benefit cost – surplus 1,000,000 2,000,000
Asset Ceiling -700,000 -1,200,000
Effect of Asset Ceiling 300,000 800,000

d. The employee benefit expense for the current year.

e. Remeasurements on December 31, 20x1.

Effect of Asset Ceiling - Dec. 31 800,000

Effect of Asset Ceiling - Jan. 1 -300,000
Increase in the effect of asset ceiling 500,000
Less: Interest Expense on Effect of Asset Ceiling - Jan.1 -30,000
Remeasurement loss on Effect of Asset Ceiling -470,000

Reameasurement Gain/Loss on FVPA 300,000

Decrease in projected benefit obligation due change in actuarial assumptions 500,000
Remeasurement loss on Effect of Asset Ceiling -470,000
Net Remeasurement Gain 330,000
fined benefit plan:
Red Company adopted a defined benefit plan on January 1, 20x1. The pension funding payment is made to the trustee on Dec

20X1 20X2
Service cost 1,500,00 1,650,000
Funding payment 1,700,000 1,850,000
Interest on defined benefit obligation 150,000
Interest income and actual return on plan assets 170,000

What is the prepaid pension cost on December 31, 20x2?

a. 200,000 b. 250,000 c. 420,000 d. 220,000

Funding payment 20x2 1,850,000

Less: Service Cost 20x2 1,650,000
c. 200,000
is made to the trustee on December 31 each year.
Orange Company had the following balances relating to a defined benefit plan on December 31, 20x1:

Fair value of plan assets 37,000,000

Projected benefit obligation 33,000,000
Asset ceiling 2,500,000

What is the prepaid benefit cost to be reported in the December 31, 20x1 statement of financial position?
a. 4,000,000 b. 1,500,000 c. 2,500,000 d. 0

Fair value of plan assets 37,000,000

Less: Projected benefit obligation 33,000,000
PBC Dec 31 20x1 a. 4,000,000
Yellow Company provided the following information pertaining to a defined benefit pension plan for the current year:

Prepaid pension cost, January 1 20,000

Current service cost 190,000
Interest expense on PBO 380,000
Interest income on plan assets 400,000
Past service cost 500,000
Employer contribution 400,000

What is the accrued pension cost at year-end?

a. 250,000 b. 290,000 c. 270,000 d. 400,000

Prepaid pension cost, January 1 20,000

Current service cost 190,000
Interest expense on PBO 380,000
Past service cost 500,000
Less: Interest income on plan assets -400,000
Employer contribution -400,000
Accrued Pension Cost At Year End b. 290,000
n for the current year:
Green Company provided the following information in relation to a defined benefit plan at yearend:

Fair value plan assets 3,450,000

Accumulated benefit obligation 4,300,000
Projected benefit obligation 5,700,000

What is the accrued liability at yea-end?

a. 5,700,000 b. 2,250,000 c. 1,400,000 d. 850,000

Projected benefit obligation 5,700,000

Less: Fair value plan assets 3,450,000
Accrued liability at year end b. 2,250,000