Question

Kingbird Company provides the following information about its defined benefit pension plan for the year 2017.

Service cost		$90,600
Contribution to the plan		103,900
Prior service cost amortization		10,100
Actual and expected return on plan assets		63,100
Benefits paid		39,600
Plan assets at January 1, 2017		644,100
Projected benefit obligation at January 1, 2017		710,600
Accumulated OCI (PSC) at January 1, 2017		149,400
Interest/discount (settlement) rate		9	%

Prepare a pension worksheet inserting January 1, 2017, balances, showing December 31, 2017. (Enter all amounts as positive.) KINGBIRD COMPANY Pension Worksheet-2017 Annual Pension Expense OCI Prior Service Cost Pension Asset/ Liability Projected Benefit Obligation Plan Assets Items Cash Balance, January 1, 2017 Service cost Interest cost Actual return Amortization of PSC Contributions Benefits Journal entry for 2017 Accumulated OCI, Dec. 31, 2016 Balance, Dec. 31, 2017 90600 Dr. 63954 Dr. 63100|Cr ▼ 10100 Dr. 101554| Dr. ▼

Answer 1

Computation of pension expense:
Service cost..............................................................$ 90,600
Interest cost ($710,600 X 9%)...............................63954
Expected return on plan assets............................. (63100)
Prior service cost amortization..............................    10,100
Pension expense for 2010.......................................$				101554
		JOURNAL ENTRIES				MEMO RECORD
ITEMS		ANNUAL PENSION EXPENSE	CASH	OCI PRIOR SERVICE COST	PENSION ASSET / LIABILITY	PROJECTED BENEFIT OBLIGATION	PLAN ASSETS
BALANCE , JAN 1, 2014					66500 CR	710600 CR	644100 DR
SERVICE COST		90600 DR				90600 CR
INTEREST COST *		63954 DR				63954 CR
ACTUAL RETURN**		63100 CR					63100 CR
AMORTIZATION OF PSC		10100 DR		10100 CR
CONTRIBUTION			103900 CR				103900 DR
BENEFITS						39600 DR	39600 CR
JOURNAL ENTRY FOR 2010***		101554 DR	103900 CR	10100 CR	12446 DR
ACCUMULATED OCI, DEC 31 2013				149400DR
BAL DEC .31, 2014				139300 DR	54054 CR	825554 CR	645300 DR
***Pension Expense..........................................................101554
***Pension Asset/Liability.................................................12446
Other Comprehensive Income (PSC)....................10,100
Cash.............................................................103900