Carla Company sponsors a defined benefit pension plan for its employees. The following data relate to the operation of the plan for the year 2017. 1. The actuarial present value of future benefits earned by employees for services rendered in 2017 amounted to $82,000. 2. The company’s funding policy requires a contribution to the pension trustee amounting to $151,000 for 2017. 3. As of January 1, 2017, the company had a projected benefit obligation of $1,603,000 and a debit balance of $429,000 in accumulated OCI (PSC). The fair value of pension plan assets amounted to $1,373,000 at the beginning of the year. The actual and expected return on plan assets was $63,000. The settlement rate was 5%. No gains or losses occurred in 2017 and no benefits were paid. 4. Amortization of prior service cost was $85,800 in 2017. Amortization of net gain or loss was not required in 2017.
Carla Company sponsors a defined benefit pension plan for its employees. The following data relate to the operation of the plan for the year 2017. 1. The actuarial present value of future benefits earned by employees for services rendered in 2017 amounted to $82,000. 2. The company’s funding policy requires a contribution to the pension trustee amounting to $151,000 for 2017. 3. As of January 1, 2017, the company had a projected benefit obligation of $1,603,000 and a debit balance of $429,000 in accumulated OCI (PSC). The fair value of pension plan assets amounted to $1,373,000 at the beginning of the year. The actual and expected return on plan assets was $63,000. The settlement rate was 5%. No gains or losses occurred in 2017 and no benefits were paid. 4. Amortization of prior service cost was $85,800 in 2017. Amortization of net gain or loss was not required in 2017.
Intermediate Accounting: Reporting And Analysis
3rd Edition
ISBN:9781337788281
Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Chapter19: Accounting For Post Retirement Benefits
Section: Chapter Questions
Problem 7RE
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Question
Carla Company sponsors a defined benefit pension plan for its employees. The following data relate to the operation of the plan for the year 2017.
| 1. | The actuarial present value of future benefits earned by employees for services rendered in 2017 amounted to $82,000. | |
| 2. | The company’s funding policy requires a contribution to the pension trustee amounting to $151,000 for 2017. | |
| 3. | As of January 1, 2017, the company had a projected benefit obligation of $1,603,000 and a debit balance of $429,000 in accumulated OCI (PSC). The fair value of pension plan assets amounted to $1,373,000 at the beginning of the year. The actual and expected return on plan assets was $63,000. The settlement rate was 5%. No gains or losses occurred in 2017 and no benefits were paid. | |
| 4. | Amortization of prior service cost was $85,800 in 2017. Amortization of net gain or loss was not required in 2017. |
(a)
Correct answer icon
Your answer is correct.
Determine the amounts of the components of pension expense that should be recognized by the company in 2017.
| Pension Expense | $enter the Pension Expense in dollars |
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List of Accounts
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(b)
Partially correct answer icon
Your answer is partially correct.
Prepare the journal entry or entries to record pension expense and the employer’s contribution to the pension trustee in 2017. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.)
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Account Titles and Explanation
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Debit
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Credit
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|---|---|---|
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enter an account title
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enter a debit amount
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enter a credit amount
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enter an account title
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enter a debit amount
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enter a credit amount
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|
enter an account title
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enter a debit amount
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enter a credit amount
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|
enter an account title
|
enter a debit amount
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enter a credit amount
|
eTextbook and Media
List of Accounts
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(c)
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