Question

Hawkins Corporation has the following balances at December 31, 2020.Projected benefit obligation $2,600,000Plan assets at fair value 2,000,000Accumulated OCI (PSC) 1,100,000What is the amount for pension liability that should be reported on Hawkins' balance sheet at December 31, 2020?

Answer 1

$600,000

Step-by-step explanation:

Given that,

Projected benefit obligation = $2,600,000

Plan assets at fair value = 2,000,000

Accumulated OCI (PSC) = 1,100,000

Therefore, the amount for pension liability is calculated by deducting the fair value of plan assets from the Projected benefit obligation.

Amount for pension liability that should be reported on Hawkins' balance sheet at December 31, 2020:

= Projected benefit obligation - Plan assets at fair value

= $2,600,000 - $2,000,000

= $600,000