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Darina [25.2K]
3 years ago
10

Pension data for Fahy Transportation Inc. include the following: ($ in millions) Discount rate, 9% Expected return on plan asset

s, 12% Actual return on plan assets, 13% Projected benefit obligation, January 1 $ 510 Plan assets (fair value), January 1 500 Plan assets (fair value), December 31 530 Benefit payments to retirees, December 31 80 Required: Assuming cash contributions were made at the end of the year, what was the amount of those contributions
Business
1 answer:
mixer [17]3 years ago
3 0

Answer: $45 million

Explanation:

Cash Contributions during the year can be calculated by;

= Ending Plan assets + Retiree benefits - Opening plan assets - Actual return

Actual return

= Actual return on plan assets * Opening plan assets

= 13% * 500

= 65

Cash contributions = 530 + 80 - 500 - 65

= $45 million

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