Question

On January 1, 2021, Carla Vista Co. has the following balances:

Projected benefit obligation $3650000
Fair value of plan assets 3550000
The settlement rate is 10%. Other data related to the pension plan for 2021 are:
Service cost $330000
Amortization of prior service costs 82000
Contributions 555000
Benefits paid 250000
Actual return on plan assets 340000
Amortization of net gain 20000
The fair value of plan assets at December 31, 2021 is:_____.
a. $3990000.
b. $4195000.
c. $3650000.
d. $3927000.

Answer 1

b. $4195000

Step-by-step explanation:

Calculation to determine what The fair value of plan assets at December 31, 2021 is:

Fair value of plan assets $3,550,000

Add Actual return on plan assets $340,000

Add Contributions $555,000

Less Benefits paid ($250,000)

Fair value of plan assets at December 31, 2021 $4,195,000

($3,550,000+$340,000+$555,000-$250,000)

Therefore The fair value of plan assets at December 31, 2021 is:$4195000