Question

The following information relates to Jackson, Inc.:

For the Year End Dec 31
2012 2013
Plan assets fv $1,310,000.00 $1,824,000.00
pension expense $570,000.00 $450,000.00
projected benefit obligation $1,620,000.00 $1,984,000.00
annual contr plan $600,000.00 $450,000.00
accumulated OCI (PSC) $480,000.00 $420,000.00

The amount reported as the liability for pensions on the December 31, 2012 balance sheet is what?

Answer 1

The pension liability reported on the balance sheet for Jackson, Inc. on December 31, 2012, is calculated by subtracting the fair value of plan assets from the Projected Benefit Obligation, resulting in $310,000.00.

Step-by-step explanation:

The amount reported as the liability for pensions on the December 31, 2012 balance sheet for Jackson, Inc. can be calculated by taking the Projected Benefit Obligation (PBO) and subtracting the fair value of the plan assets. On December 31, 2012, the PBO is $1,620,000.00 and the fair value of plan assets is $1,310,000.00. Therefore, the pension liability that will be reported on the balance sheet is the difference: $1,620,000.00 - $1,310,000.00, which equals $310,000.00.