Question

The following information for Cooper Enterprises is given below:December 31, 2018Assets and obligations Plan assets (at fair value) $600,000Accumulated benefit obligation 1,110,000Projected benefit obligation 1,200,000Other Items Pension asset / liability, January 1, 2018 30,000Contributions 360,000Accumulated other comprehensive loss 503,700There were no actuarial gains or losses at January 1, 2018. The average remaining service life of employees is 10 years. What is the amount that Cooper Enterprises should report as its pension liability on its balance sheet as of December 31, 2018?a. $600,000b. $90,000c. $1,110,000d. $1,200,000

Answer 1

a. $600,000

Step-by-step explanation:

The computation of the amount reported as a pension liability on the balance sheet is as follows:

= Projected benefit obligation - plant asset at fair value

= $1,200,000 - $600,000

= $600,000

Hence, the amount reported as a pension liability on the balance sheet is $600,000

Therefore the correct option is a.