Question

Problem 5. Pension Worksheet. Howard Corp, sponsors a defined benefit pension plan for its employees. On January 1, 2017, the following balances related to this plan. Plan assets (market-related value) $450,000 Projected benefit obligation 600,000 Prior service cost 100,000 OCI - Gain 65,000 Average remaining service life in years 10 As a result of the operation of the plan during 2017, the actuary provided the following additional data at December 31, 2017 Service cost for 2017 $75,000 Actual return on plan assets in 2017 45,000 Amortization of prior service cost 20,000 Contributions in 2017 115,000 Benefits paid retirees in 2017 70,000 Settlement rate Expected return rate Instructions (a) Compute pension expense for Howard Corp. for the year 2017 by preparing a pension worksheet. (b) Prepare the journal entry for pension expense. 7%

Answer 1

senice cost $75000 Intexst cost $4200 0 $660000 X7%) Defelled gais $9000 ($45000-Y3V000x8%) Proi seluce cost amonsabios 4 $20000 Actual return $45000) Expense of pension cost $101000 1 Record of sesuice cost, intexst cost & actual retum on plan asset Net pension expense $72000 Pension leability $72000 2 Record of deferred gain Met Pension expense $9000 19 SUNDAY nse OCY $ 9000

3) Record of amaibsabion of pics selnice cost Net pension expense. $20000 OCL $20000