Question

for sunland corporation, year-end plan assets were $2,010,000. at the beginning of the year, plan assets were $1,808,000. during the year, contributions to the pension fund were $125,000, and benefits paid were $198,000. compute sunland's actual return on plan assets.

Answer 1

To compute Sunland Corporation's actual return on plan assets, subtract the beginning plan assets from the year-end plan assets, add any contributions made, and subtract the benefits paid.

Step-by-step explanation:

To compute Sunland Corporation's actual return on plan assets, we need to determine the change in plan assets during the year. The change in plan assets is calculated by subtracting the beginning plan assets from the year-end plan assets and adding any contributions made to the pension fund and subtracting the benefits paid.

Change in plan assets = Year-end plan assets - Beginning plan assets + Contributions - Benefits paid

Using the given information:

Change in plan assets = $2,010,000 - $1,808,000 + $125,000 - $198,000 = $129,000

To calculate the actual return on plan assets, we divide the change in plan assets by the beginning plan assets:

Actual return on plan assets = Change in plan assets / Beginning plan assets = $129,000 / $1,808,000 = 0.0713 or 7.13%