Ask Question
14 August, 21:56

Van Nuen Inc. began a defined-benefit pension plan for its employees on January 1, 2018. The following data are provided for 2018, as of December 31, 2018:

Projected benefit obligation $ 785,000

Accumulated benefit obligation 740,000

Plan assets at fair value 655,000

Pension expense 715,000

Employer's cash contribution (end of year) 655,000

What amount should Van Nuen report as its net pension liability at December 31, 2018?

a. $45,000

b. $85,000

c. $130,000

d. $0

+3
Answers (2)
  1. 14 August, 22:12
    0
    c. $130,000

    Explanation:

    The net pension liability is the difference between the total pension liability (the present value of projected benefit payments to employees based on their past service) and the assets (mostly investments reported at fair value) set aside to pay current employees, retirees, and beneficiaries.

    To calculate this:

    Net Pension Liability = Projected benefit Obligation - Plan assets at fair value

    = $ 785,000 - $655,000

    = $130,000

    Therefore Van Nuen's net pension liability at December 31, 2018 can be reported as $130,000.
  2. 14 August, 22:18
    0
    Answer:The answer is C $130,000

    Explanation:

    Using the formula

    Net pension liability = Projected benefit obligation - Fair value of the plan Asset

    Projected benefit obligation = $785,000

    Fair value of the plan Asset = $655,000

    785,000 - 655,000

    = $130,000
Know the Answer?
Not Sure About the Answer?
Find an answer to your question 👍 “Van Nuen Inc. began a defined-benefit pension plan for its employees on January 1, 2018. The following data are provided for 2018, as of ...” in 📗 Business if the answers seem to be not correct or there’s no answer. Try a smart search to find answers to similar questions.
Search for Other Answers