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comprehensive computation of pension cost components the actuaries for interconnect 692825

Comprehensive Computation of Pension Cost Components

The actuaries for Interconnect Cable Company provided its accountants with the following information related to the company’s pension plan:

 

(in thousands)

December 31, 2007:

 

Increase in PBO arising from plan’s amendment                              

$ 684

January 1, 2008:

 

PBO                                                             

$2,700

ABO                                                             

$2,420

Fair value of the pension fund                                           

$1,860

Market related value of the pension fund (5 year weighted average)                

$1,600

Accrued pension cost                                                 

$ 226

Settlement discount rate                                               

10%

Average service life for amortization of gain and prior service costs               

14 years

Unamortized pension gain—prior year                                     

$ 70

Expected rate of return                                                

9%

For Year 2008:

 

Benefit payments to retirees                                            

$ 173

Contributions to pension plan                                           

290

December 31, 2008:

 

PBO                                                             

$2,917

Fair value of pension plan assets                                         

2,137

Instructions: Based on the data provided, prepare a pension work sheet for Interconnect Cable Company for 2008. The 5 year weighted average value of plan assets is used in computing the expected return.

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