Gottschalk Company sponsors a defined benefit plan for its 100 employees. On January 1, 2025, the companys

Question:

Gottschalk Company sponsors a defined benefit plan for its 100 employees. On January 1, 2025, the company’s actuary provided the following information.image


The average remaining service period for the participating employees is 10 years. All employees are expected to receive benefits under the plan. On December 31, 2025, the actuary calculated that the present value of future benefits earned for employee services rendered in the current year amounted to $52,000; the projected benefit obligation was $490,000; fair value of pension assets was $276,000; the accumulated benefit obligation amounted to $365,000. The expected return on plan assets and the discount rate on the projected benefit obligation were both 10%. The actual return on plan assets is $11,000. The company’s current year’s contribution to the pension plan amounted to $65,000. No benefits were paid during the year.



Instructions


a. Determine the components of pension expense that the company would recognize in 2025. (With only one year involved, you need not prepare a worksheet.)


b. Prepare the journal entry to record the pension expense and the company’s funding of the pension plan in 2025.


c. Compute the amount of the 2025 increase/decrease in gains or losses and the amount to be amortized in 2025 and 2026.


d. Indicate the pension amounts reported in the financial statements as of December 31, 2025.

Fantastic news! We've Found the answer you've been seeking!

Step by Step Answer:

Related Book For  book-img-for-question

Intermediate Accounting

ISBN: 9781119790976

18th Edition

Authors: Donald E. Kieso, Jerry J. Weygandt, Terry D. Warfield

Question Posted: