etermine the pension expense to be reported in 2021.
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 4E
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Question
Wildhorse, Inc. received the following information from its pension plan trustee concerning the operation of the company's defined-benefit pension plan for the year ended December 31, 2021:
The service cost component for 2021 is $137,500 and the amortization of prior service cost is $236,000. The company's actual funding of the plan in 2021 amounted to $500,000. The expected return on plan assets and the settlement rate were both 9%.
| January 1, 2021 | December 31, 2021 | |||||
| Projected benefit obligation | $2,480,000 | $2,790,000 | ||||
| Fair value of plan assets | 1,150,000 | 1,460,000 | ||||
| Accumulated benefit obligation | 1,921,000 | 2,611,000 | ||||
| Accumulated OCI―(PSC) | 532,000 | 296,000 |
The service cost component for 2021 is $137,500 and the amortization of prior service cost is $236,000. The company's actual funding of the plan in 2021 amounted to $500,000. The expected return on plan assets and the settlement rate were both 9%.
(a)
Determine the pension expense to be reported in 2021.
| Pension expense |
$
|
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(b)
The parts of this question must be completed in order. This part will be available when you complete the part above.
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