In Fisk Company€™s negotiations with its employees€™ union on January 1, 2016, the company agreed to an amendment that increased the employee benefits based on services rendered in prior periods. This resulted in an $80,000 prior service cost that increased the projected benefit obligation of the company. Due to financial constraints, Fisk decided not to hind the total increase in its pension obligation at that time.
Prior to 2016, it had been Fisk€™s policy to fond only some of its pension expense each year so that the fair value of the plan assets at the end of the year was less than the year-end projected benefit obligation. As a result, Fisk reported an accrued/prepaid pension cost liability of $40,000 on its December 31, 2015, balance sheet.
Fisk appropriately amortized the prior service cost over a 10-ycar service life as a component of pension expense in 2016 and 2017. The resulting pension and other information for 2016 and 2017 are as follows:

aFunded December 31
bAt year-end
Required:
1. Prepare all the journal entries related to Fisk€™s pension plan for 2016.
2. List the amounts of any accounts related to Fisk€™s pension plan to be reported on the company€™s December 31, 2016, balance sheet. Indicate in what sections they would be reported.
3. Prepare all the journal entries related to Fisk's pension plan for 2017.
4. List the amounts of any accounts related to Fisk€™s pension plan to be reported on the company€™s December 31, 2017, balance sheet. Indicate in what sections they would be reported.

Transcribed Image Text:

Projected Benefit Fair Value of Plan Year 2016 2017 Pension Expense $137000 152,900 Company Contribution $125,000 142,000 Obligation $579,000 769,400 Assets $455,000 642,500