Question

Problem 17-9 Determine pension expense; PBO; plan assets; net pension asset or liability; Journal entries [LO17-3, 17-4, 17-5, 17-6,17-7,17-8] U.S. Metallurgical Inc. reported the following balances in its financial statements and disclosure notes at December 31, 2017 Plan assets Projected benefit obligation $550.000 428,888 U.S.M.'s actuary determined that 2018 service cost is $75,000. Both the expected and actual rate of return on plan assets are 8%. The interest (discount) rate is 5%. U.S.M. contributed $135,000 to the pension fund at the end of 2018, and retirees were paid $59.000 from plan assets. (Enter your answers in thousands (I.e., 10,000 should be entered os 10).) Required: 1 to 4. Determine the following amounts at the end of 2018. 5. Prepare journal entries to record the pension expense, funding of plan assets, and retiree benefit payments. Complete this question by entering your answers in the tabs below. Reg 1 to 4 Reg 5 Determine the following amounts at the end of 2018. (Enter your answers in thousands (i.e., 10,000 should be entered as 10).) December 31, 2018 64.800 1 Pension expense 2 Projected benefit obligation 3 Plan assets Reg 1 to 4 Reg 5 >

Answer 1

$75000 $ 21000 (1) Pension expense Service cost Interest cost C420000x5°% (-) Return on plan asset Experie for pension (44000) $53000 (2) Projected benefit - Beg PBO Add: Service cost ant (c) benefits paid Ending PBO obligation 480000 75000 $21000 ($59000) $457000

(3) Plan assets cu it $ 559000 Beginning contribuisson $135000 achial actum $44000 e Benefets paid ($59000) Ending balance. $670000 w Net Pension Asset / liability Plan Aeset $670000 E) РВо $457000 - Asset $213000 Journal Enby 1) Net Pension expense $52000 Pension liability /asset $52000!