Question

The following incomplete (columns have missing amounts) pension spreadsheet is for Old Tucson Corporation (OTC).

Answer 1

Solution:

Service cost (from pension expense column) = $89 = ($89) in the PBO column

Interest cost (from pension expense column) = $32 = ($32) in the PBO column

Loss on PBO (given) = ($34)

Retiree benefits (from plan assets column) = ($61) = $61 in the PBO column

Ending PBO = ($670) + (89) + (32) + (34) + 61 = ($886)

Net pension liability = ($886) + 331 = ($555)

Net pension asset of $555.00 was the balance of the net pension asset/liability reported in the balance sheet at the end of the previous year