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Problem 3-7, p. 214
Analyzing Pension Plan Disclosures
Campbell Soup
a. Explain what the service cost of $ 22.1 for Year 11 represents.
b. What discount rate did the company assume for Year 11? What is the effect of Campbell’ s change from the discount rate used in Year 10?
c. How is the“ interest on projected benefit obligation” computed?
d. Actual return on assets is $ 73.4. Does this item enter in its entirety as a component of pension cost? Explain
e. Campbell shows an accumulated benefit obligation( ABO) of $ 714.4. What is this obligation?
f. Identify the PBO amount and explain what accounts for the difference between it and the ABO.
g. Has Campbell funded its pension expense at the end of Year 11?
Question 4-10, p. 263