Pension data for Sam Adams Inc. include the following for the current calendar y

Question

Pension data for Sam Adams Inc. include the following for the current calendar year:

Determine pension expense for the year. (Amounts to be deducted should be indicated with a minus sign.)

      

Prepare the journal entries to record pension expense and funding for the year. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)

      

Pension data for Sam Adams Inc. include the following for the current calendar year:

Discount rate, 8% Expected return on plan assets, 10% Actual return on plan assets, 9% Service cost, $460,000

Explanation / Answer

1 Pension expenses Amount in $ Service cost        4,60,000 Interest Cost        2,44,800 (3060000 * 8% ) Less :Expected return       -3,26,000 (3260000 * 10% ) Amortization of prior service cost            36,000 Less :Amortization of net gain             -7,600 Pension expenses        4,07,200 2 Pension expenses        4,07,200    Prepaid/accrued pension cost 1,26,200    cash 2,81,000 ( to record pension expenses for the year)

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