Business, 05.03.2020 04:06 annikafischer

On January 1, 2018, Gillock Climbing Academy instituted a defined benefit pension plan for its employees. The annual service cost for each year of 2018 and 2019 was $600,000. The interest rate used to determine the projected benefit obligation is 10%. Both the actual and the expected return on plan assets are 8% for both years. Gillock funded the plan in the amount of $400,000 each January 1, beginning on January 1, 2018. What amount of pension expense should Gillock report in its income statement for the year ended December 31, 2019?

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Answer from: d1Dej

Pension Expense = EBE = $593440 for income statement

Explanation:

The opening balance of the Plan asset is made by the 40000 from 2018 plus interest of 32000 and the new 400000 made this year. Why include it? Because an opening balance are the funds in an account at the beginning of the year either from last year or are from current year but should be the first entry in the books of the current year.

DBO plan asset EBE

opening balance (600000) 832000 -

interest ( 60000) 66560 6560

current year's service cost (600000) (600000)

( 1260000 ) 898560 593440

balance sheet liability = 361440

Answer from: shanice13

The pension expense to be reported in the income statement of Gillock for the year ended 31st December,2019 is $593,440.00

Explanation:

Find attached spreadsheet for detailed computation.

Answer from: Quest

one of the disadvantages of getting a government sponsored mortgage is they put a limit on the purchase price of the house. because the government is in charge of the mortage loan and terms, they are able to control how much money they are allowing someone to take out for the loan. not only are they incontrol, it's a lengthy process for a government sponsored mortgage.

What is one of the disadvantages of getting a government sponsored mortgage?

Answer from: Quest

Dwould be the correct answer to this problem

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