You have the following information related to Chalmers Corporation s pension plan: 1. Defined…

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You have the following information related to Chalmers Corporation s pension plan: 1. Defined benefit, noncontributory pension plan. 2. Plan initiation, January 1, 2017 (no credit given for prior service). 3. Retirement benefits paid at year-end with the first payment one year after retirement. 4. Assumed discount rate of 7%. 5. Assumed expected rate of return on plan assets of 9%. 6. Annual retirement benefit equals years of credited service × 0.02 × highest salary. You have the following information for Frank Bullitt, the firm s only employee: Start date………………………………………….January 1, 2014 Expected retirement date……………………..December 31, 2031 Expected number of payments during retirement………………20 Selected actual and expected salary levels: Date Salary Level January 1, 2014……………………………$22,000 January 1, 2017……………………………..27,000 January 1, 2018……………………………..30,000 January 1, 2031……………………………..75,000 Required: 1. Calculate the service cost and the interest cost components of pension cost for 2017 and 2018. 2. Calculate the PBO at the end of 2017 and 2018. 3. Compute the fair value of plan assets for 2017 and 2018, assuming that $1,200 in contributions is made to the pension fund at the end of each year. There were no actuarial gains or losses during 2017 or 2018. 4. Compute funded status at Decem

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