Question

Exercise 20-11 (Part Level Submission) Culver Company sponsors a defined benefit pension plan for its employees. The following data relate to the operation of the plan for the year 2017 in which no benefits were paid. 1. The actuarial present value of future benefits earned by employees for services rendered in 2017 amounted to $56,200. 2. The company's funding policy requires a contribution to the pension trustee amounting to $146,676 for 2017. 3. As of January 1, 2017, the company had a projected benefit obligation of $906,400, an accumulated benefit obligation of $800,900, and a debit balance of $398,600 in accumulated OCI (PSC). The fair value of pension plan assets amounted to $595,400 at the beginning of the year. The actual and expected return on plan assets was $53,400. The settlement rate was 9%. No gains or losses occurred in 2017 and no benefits were paid. 4. Amortization of prior service cost was $50,400 in 2017. Amortization of net gain or loss was not required in 2017. (a) Determine the amounts of the components of pension expense that should be recognized by the company in 2017. (Enter amounts that reduce pension expense with either a negative sign preceding the number e.g.-45 or parenthesis e.g. (45).) Components of Pension Expense Service Cost 56200 Interest on Projected Benefit Obligation 81576 Expected Return on Plan Assets -53400 Amortization of Prior Service Cost 50400 Pension Expense Click if you would like to show Work for this question: Open Show Work

Answer 1

Answer-a-

Components of Pension Expense

Service Cost	$56,200
Interest on Projected Benefit Obligation ($906,400*9%)	$81,576
Expected return on Plan Assets	($53,400)
Amortization of Prior Cost	$50,400
Pension Expense	$134,776

Journal entry

Account Titles and Explanation	Debit	Credit
Pension Expense	$134,776
Pension Assets/ Liabilities	$62,300
Cash		$146,676
Other Comprehensive Income (PSC)		$50,400