Question

Hood 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) $360,000

Projected benefit obligation 520,000

Pension asset/liability 160,000 Cr.

Prior service cost 105,000

Net gain or loss (debit) 71,000

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 $94,000

Settlement rate, 6%

expected return rate, 8%

Actual return on plan assets in 2017 36,000

Amortization of prior service cost 21,000

Amortization of OCI- gains/losses $1,900

Contributions in 2017 80,000

Benefits paid retirees in 2017 74,000

Average remaining service life of active employees 10 years

Instructions Using the preceding data, compute pension expense for Hood Corp. for the year 2017 by preparing a pension worksheet that shows the journal entry for pension expense. Use the market-related asset value to compute the expected return and for corridor amortization.

Answer 1

Particulars Baean 1, 2017 Service Cost Expected Return Interest Cost PSC Amortization Amortization G/L Contribution Benefit paid Annual Pension Expense CashEOCI PSC OCI Gain/ Loss Pension Asset/Liability PBO Plan Assets 3,60,000 1,05,000 1, 60,00n0 E 5,20,000 -94,000 94,000 28,800 31,200 21,000 900 7,200 36,000 31,200 21,000 1,900 80,000 80,0n0 4,000 4000 1,19,300 80,000 21,000 9,100 9.200 Particulars Pension Expense OCI Gain/Loss Pension Asset Liabili Cash OCI PSC Debit Credit 1,19,300 9.200