The following information is available for the pension plan of Radcliffe Company

Question

The following information is available for the pension plan of Radcliffe Company for the year 2014.

Compute pension expense for the year 2014. $___________

Prepare the journal entry to record pension expense and the employer’s contribution to the pension plan in 2014.

Pension Expense ?? dr

Pension Asset/Liability ?? dr

Cash ?? cr

(Other Account-Unknown) ?? cr

Actual and expected return on plan assets $ 17,640 Benefits paid to retirees 39,460 Contributions (funding) 93,760 Interest/discount rate 12 % Prior service cost amortization 8,960 Projected benefit obligation, January 1, 2014 555,700 Service cost 71,460

Explanation / Answer

(a)

(b)

Service cost $71,460 Interest cost ($555,700 X .12) $66,684 Expected return on plan assets ($17,640) Unrecognized prior service cost amortization $8,960 Pension expense for 2014 $129,464

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