Puhlman Inc. provides a defined benefit pension plan to its employees. It uses a market- related (smoothed) value to compute its expected return. Additional information follows:

During 2014, the PBO increased by $33,000 due to a decrease in the discount rate from the previous year. The 2013 discount rate assumption was used to compute 2014 service cost and interest cost.

Round all amounts to the nearest dollar:
1. Compute the fair value of plan assets at December 31, 2014.
2. Compute the prior service cost that would be amortized as a component of pension expense for 2014 and 2015.
3. Compute the PBO at December 31, 2014.
4. Compute pension expense for 2014.
5. Prepare the company’s required pension journal entries for 2014.
6. Compute the 2014 increase/decrease in AOCI—net actuarial (gains) or losses and the amount to be amortized in 2014 and 2015.
7. Confirm that the pension asset (liability) on the balance sheet equals the funded status as of December 31,2014.

  • CreatedSeptember 10, 2014
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