Question

For Warren Corporation, year-end assests were $2,000,000. At the beginning of the year, plan assests were $1,780,000. During the year, contributions to the pensioon fund were $120,000, and benefits paid were $200,000. Compute Warren's actual return on plan assets.

Answer 1

Actual return on plan assets=$300,000

Step-by-step explanation:

Year End Assets=$2,000,000

Plan Assets at the beginning of year=$1,780,000

Contribution to the pension Fund=$120,000

Benefits paid=$200,000

Solution:

Net amount in year= Assets at the beginning+Contribution to the pension Fund-Benefits paid

Net amount in year=$1,780,000+$120,000-$200,000

Net amount in year=$1,700,000

Actual return on plan assets=Year End Assets-Net amount in year

Actual return on plan assets=$2,000,000-$1,700,000

Actual return on plan assets=$300,000