Presented below is information related to the pension plan for Colette Inc. for the year 2021.1. The projected benefit obligation at the beginning of the year is $700,000, and thesettlement rate is 6%.2. The fair value of pension plan assets at the beginning of the year is $650,000, and theexpected return is 9%. The actual return on pension plan assets equals $48,000.3. At the beginning of the year, Colette has Accumulated OCI (loss) of $90,000. Anyamortization of unrecognized net loss is recognized on a straight-line basis over theaverage remaining service-life of the employees, which equals 8 years.4. At the beginning of the year, Colette has Accumulated OCI (prior service cost) of$128,000. The company amortizes the prior service cost on a straight-line basis over theaverage remaining service-life of the employees, which equals 8 years.5. The service cost related to pension expense is $180,000.6. The contributions made to the pension fund in 2021 were $151,000.7. The benefits paid out to retirees in 2021 were $79,000.Instructions(a) Determine the pension expense to be reported on the income statement for 2021.(b) Prepare the journal entry to record pension expense for 2021.

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Answered: Instructions (a) Determine the pension…

Instructions (a) Determine the pension expense to be reported on the income statement for 2021. (b) Prepare the journal entry to record pension expense for 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 10P

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