Question

Pension data for Barry Financial Services Inc. include the following:

	($ in 000s)
Discount rate, 7%
Expected return on plan assets, 12%
Actual return on plan assets, 11%
Service cost, 2018	$	360
January 1, 2018:
Projected benefit obligation		2,550
Accumulated benefit obligation		2,250
Plan assets (fair value)		2,650
Prior service cost–AOCI (2018 amortization, $50)		350
Net gain–AOCI (2018 amortization, $8)		380
There were no changes in actuarial assumptions.
December 31, 2018:
Cash contributions to pension fund, December 31, 2018		295
Benefit payments to retirees, December 31, 2018		320

Required:
1. Determine pension expense for 2018.
2. Prepare the journal entries to record pension expense, gains and losses (if any), funding, and retiree benefits for 2018.

• Required 1
• Required 2

Determine pension expense for 2018. (Amounts to be deducted should be indicated with a minus sign. Enter your answers in thousands rounded to 1 decimal place (i.e., 5,500 should be entered as 5.5).)

	Pension Expense Service cost $360.0 Interest cost 178.5 Expected return on assets ??? Amortization of net gain (8.0) Amortization of prior service cost 50.0 Pension expense $886.5

• Required 2

Prepare the journal entries to record pension expense, gains and losses (if any), funding, and retiree benefits for 2018. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Enter your answers in thousands rounded to 1 decimal place (i.e., 5,500 should be entered as 5.5).)

No	Event	General Journal	Debit	Credit
1	1	Pension expense
		Plan assets
		Amortization of net gain—OCI
		Amortization of prior service cost—OCI
		PBO
2	2	Loss—OCI
		Plan assets
3	3	Plan assets
		Cash
4	4	PBO
		Plan assets

Answer 1

Solution Seguice Cest 360 178.5 198.5 (318) Interest cest (2550 x 7%) Expected rate of return (2650X110%) +(2650 X (1267.-19.)] Amortization of prior service cost Amortization of prior Net gain . Pension Exp 262-5 1. 262.5 318 Pension expense Plan assetę. Amortization of Net gain - Oci Amortization of perles Sexice cest-04 50 PBO 538.5 loss- och 26.5 plan assetę 26.5 plan asseth 295 cash 295 320 рро Plan assetz 320