Question

For Pronghorn Corporation, year-end plan assets were $2,035,000. At the beginning of the year, plan assets were $1,770,000. During the year, contributions to the pension fund were $116,000, and benefits paid were $218,000. Compute Pronghorn’s actual return on plan assets.

Answer 1

The answer is: $367,000

Step-by-step explanation:

To determine Pronghorn Corporation's actual return on plan assets we can use the following formula:

return on plan assets = (year-end plan assets - beginning of the year plan assets) - (contribution to the pension fund - benefits paid)

return on plan assets = ($2,035,000 - $1,770,000) - ($116,000 - $218,000)

return on plan assets = $265,000 - (-$102,000) = $265,000 + $102,000

return on plan assets = $367,000