Question 25 January 1, 2017 December 31, 2017 Determine the amounts of the compo

Question

Question 25

January 1, 2017

December 31, 2017

Determine the amounts of the components of pension expense that should be recognized by the company in 2017. (Enter amounts that reduce pension expense with either a negative sign preceding the number e.g. -45 or parenthesis e.g. (45).)

Components of Pension Expense

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

Account Titles and Explanation

Debit

Credit

(To record pension expense and employer’s contribution)

Indicate the pension-related amounts that would be reported on the income statement and the balance sheet for Splish Company for the year 2017.

$XXXX

$XXXX

Question 25

Splish Company received the following selected information from its pension plan trustee concerning the operation of the company’s defined benefit pension plan for the year ended December 31, 2017.

January 1, 2017

December 31, 2017

Projected benefit obligation $1,498,000 $1,526,000 Market-related and fair value of plan assets 784,000 1,116,400 Accumulated benefit obligation 1,572,000 1,691,700 Accumulated OCI (G/L)—Net gain 0 (199,800 )
The service cost component of pension expense for employee services rendered in the current year amounted to $78,000 and the amortization of prior service cost was $119,700. The company’s actual funding (contributions) of the plan in 2017 amounted to $254,000. The expected return on plan assets and the actual rate were both 10%; the interest/discount (settlement) rate was 10%. Accumulated other comprehensive income (PSC) had a balance of $1,197,000 on January 1, 2017. Assume no benefits paid in 2017.

Explanation / Answer

Service Cost $        78,000 Interest on projected benefit obligations $1,498,000*10% 149800 Expected return on plan assets (784,000*10%) -78400 Amortization of prior service cost 119700 Pension expense — 2017 $     269,100 Pension Expense $     269,100 Pension Asset/Liability $     104,600 Cash 254000 Other Comprehensive Income (PSC) 119700

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