Question

At December 31, 2020, Besler Corporation had a projected benefit obligation of $560,000, plan assets of $322,000, and prior service cost of $127,000 in accumulated other comprehensive income. Determine the pension asset/liability at December 31, 2020. (Enter liability using either a negative sign preceding the number e.g. -45 or parentheses e.g. (45).)

Answer 1

To determine the pension asset/liability at December 31, 2020, subtract the fair value of plan assets from the projected benefit obligation. In this case, the pension asset/liability is $238,000.

Step-by-step explanation:

To determine the pension asset/liability at December 31, 2020, we need to calculate the funded status of the pension plan. The funded status is the difference between the projected benefit obligation (PBO) and the fair value of plan assets.

Pension asset/liability = PBO - Plan assets

PBO = $560,000

Plan assets = $322,000

Pension asset/liability = $560,000 - $322,000 = $238,000

Therefore, the pension asset/liability at December 31, 2020 is $238,000.

Answer 2

The pension asset/liability of Besler Corporation at December 31, 2020, is a pension liability of $238,000, calculated by subtracting the fair value of plan assets from the projected benefit obligation.

Step-by-step explanation:

The Besler Corporation's pension asset/liability at December 31, 2020, can be determined by calculating the difference between the projected benefit obligation and the fair value of the plan assets. The prior service cost in accumulated other comprehensive income is not directly relevant in this calculation.

Here is the calculation:

• Projected Benefit Obligation (PBO): $560,000
• Plan Assets at Fair Value: $322,000

Pension Asset/Liability = Plan Assets - Projected Benefit Obligation

Pension Asset/Liability = $322,000 - $560,000

Pension Asset/Liability = -$238,000

Therefore, Besler Corporation has a pension liability of $238,000.