C. accumulated benefit obligation. D. unfunded projected benefit obligation.
44) On January 1, 2008, Pratt Corp. adopted a defined-benefit pension plan. The plan ‟ s service cost of $ 300,000 was fully funded at the end of 2008. Prior service cost was funded by a contribution of $ 120,000 in 2008. Amortization of prior service cost was $ 48,000 for 2008. What is the amount of PrattТs prepaid pension cost at December 31, 2008?
A. $ 168,000 B. $ 72,00 C. $ 120,000 D. $ 180,000
45) Effective January 1, 2007, Quayle Co. established a definedbenefit plan with no retro-active benefits. The first of the required equal annual contributions was paid on December 31, 2007. A 10 % discount rate was used to calculate service cost and a 10 % rate of return was assumed for plan assets. All information on covered employees for 2007 and 2008 is the same. How should the service cost for 2008 compare with 2007, and should the 2007 balance sheet report an accrued or a prepaid pension cost?
Service Cost for 2008 Compared to 2007 | Pension Cost Reported on the 2007 Balance Sheet
A. Greater than | Accrued B. Equal to | Accrued C. Equal to | Prepaid D. Greater than | Prepaid