ACC 451 ASSIGNMENT.

ACC 451 ASSIGNMENT.

Penny Pincher Company has a defined benefit pension plan for its employees. The following pension data are available at year end (in millions):

Accumulated benefit obligation	$142
Projected benefit obligation	205
Fair value of plan assets	175

There is no balance in prepaid/accrued pension costs.

Required:

1. Calculate the funded status of the plan (see SFAS No. 158for a definition of funded status). Is the plan overfunded or underfunded?

1. If the projected benefit obligation provides the appropriate measure of the company’s obligation for pension benefits and the assets in the fund are viewed as satisfying all or part of that obligation, what is Penny Pincher’s liability, if any, for the pension plan at year-end? Explain, citing the Conceptual Framework’s definition of liabilities in your explanation.
2. What amount will Penny Pincher have to report in its balance sheet? Is it an asset or a liability?

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