At the end of 2020, the balances in the accounts related to the defined benefit...
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Finance
At the end of 2020, the balances in the accounts related to the defined benefit pension plan of the Norton Company were as follows:
Projected benefit obligation 690,000
Unrecognized prior service cost (remainder to be amortized over 12 years) 37,750
Unrecognized net loss 123,000
Plan assets (at fair value) 722,625
On 1/1/21, Norton amended the plan to provide an increased amount of pension benefits; the prior service cost resulting from this amendment was $45,500. At 1/1/21, the average remaining service life of employees expected to receive benefits was 10 years. The following information relates to the year 2021: Service Cost 70,625
Settlement rate 5%
Expected rate of return on plan assets 4%
Plan contribution (at year-end) 103,500
Benefit payments to retirees (at year-end) 90,750
In 2021, Nortons actual return on plan assets was $27,500. Norton follows a policy of recognizing gains/losses on a delayed basis using the "corridor approach". At the end of 2021, there was one change in the estimates and assumptions relating to computation of the projected benefit obligation, resulting in a decrease in the PBO of $29,000.
Prepare the pension note required for the 12/31/21 financial statements.
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