Reser Corp., a company whose stock is publicly traded, provides a noncontributory defined-benefit pension plan for its employees. The company's actuary has provided the following information for the year ended December 31, 2008:
The market -related asset value equals the fair value of plan assets. No contributions have been made for 2008 pension cost. In its December 31, 2008 balance sheet, Reser should report a(n)
A) $600,000 pension liability.
B) $824,000 pension asset.
C) $225,000 pension asset.
D) $525,000 pension liability.

Question

Reser Corp., a company whose stock is publicly traded, provides a noncontributory defined-benefit pension plan for its employees. The company's actuary has provided the following information for the year ended December 31, 2008:
 The market -related asset value equals the fair value of plan assets. No contributions have been made for 2008 pension cost. In its December 31, 2008 balance sheet, Reser should report a(n)
A) $600,000 pension liability. 
B) $824,000 pension asset. 
C) $225,000 pension asset. 
D) $525,000 pension liability.

Quizplus · Accepted Answer

$825,000 - $600,000 = $225,000.