Question

Sunland Company sponsors a defined benefit plan for its 100 employees. On January 1, 2025, the company's actuary provided the following information.

Accumulated other comprehensive loss(PSC) $149,800
Pension plan assets (fair value and market-related asset value) $198,700
Accumulated benefit obligation $259,500
Project benefit obligation $387,200

The average remaining service period for the participating employees is 10 years. All employees are expected to receive benefits under the plan. On December 31, 2025, the actuary calculated that the present value of future benefits earned for employee services rendered in the current year amounted to $49,100; the projected benefit obligation was $486,600; fair value of pension assets was $275,600; the accumulated benefit obligation amounted to $362,700. The expected return on plan assets and the discount rate on the projected benefit obligation were both 10%. The actual return on plan assets is $10,300. The company's current year's contribution to the pension plan amounted to $66,600. No benefits were paid during the year. Indicate the pension amounts reported in the financial statement as of December 31, 2025.

Answer 1

The pension amounts reported in the financial statement as of December 31, 2025, include the accumulated other comprehensive loss, pension plan assets, projected benefit obligation, and the actual return on plan assets.

Step-by-step explanation:

The pension amounts reported in the financial statements as of December 31, 2025, are as follows:

• Accumulated other comprehensive loss (PSC): $149,800
• Pension plan assets (fair value and market-related asset value): $198,700
• Projected benefit obligation: $486,600
• Actual return on plan assets: $10,300

To calculate the accumulated other comprehensive loss (PSC), you subtract the fair value of plan assets from the projected benefit obligation. In this case, it is $486,600 - $198,700 = $287,900. However, the PSC cannot exceed 10% of the greater of the projected benefit obligation or the market-related asset value. In this case, 10% of the market-related asset value is $19,870. Since $287,900 exceeds $19,870, the accumulated other comprehensive loss (PSC) is limited to $19,870.