Question

The following information relates to Hatami Company's defined benefit pension plan during the current reporting year:

Plan assets at fair value, January 1 $640,000,000
Expected return on plan assets 54,000,000
Actual return on plan assets 44,000,000
Contributions to the pension fund (end of year) 94,000,000
Amortization of net loss 0
Pension benefits paid (end of year) 36,000,000
Pension expense 64,000,000

Required:
Determine the balance of pension plan assets at fair value on December 31.

Answer 1

Answer: $742,000,000

Step-by-step explanation:

The balance of pension plan assets at fair value on December 31 will be:

Plan Assets at Fair value, January 1 = $640,000,000

Add: Actual return on plan assets = $44,000,000

Add: Contributions to the pension fund (end of year) = $94,000,000

Less: Pension benefits paid (end of year) = $36,000,000

Plan Assets at Fair value, December 31 = $742,000,000