Latoya Company provides the following selected information related to its defined benefit pension plan for 2012. Pension

Question:

Latoya Company provides the following selected information related to its defined benefit pension plan for 2012.

Pension asset/liability (January 1)                                 $ 25,000 Cr.
Accumulated benefit obligation (December 31)              400,000
Actual and expected return on plan assets                        10,000
Contributions (funding) in 2012                                      150,000
Fair value of plan assets (December 31)                         800,000
Settlement rate                                                                       10%
Projected benefit obligation (January 1)                         700,000
Service cost                                                                        80,000

Instructions
  (a) Compute pension expense and prepare the journal entry to record pension expense and the employer’s contribution to the pension plan in 2012. Preparation of a pension worksheet is not required. Benefits paid in 2012 were $35,000.
  (b) Indicate the pension-related amounts that would be reported in the company’s income statement and balance sheet for 2012.

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Related Book For  book-img-for-question

Intermediate Accounting

ISBN: 978-0470587287

14th Edition

Authors: kieso, weygandt and warfield.

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