Kennedy Company had a defined benefit obligation of $6,300,000 and plan assets of $4,900,000 at January 1, 2019. Kennedy has the following data related to the plan during 2019.
Discount (interest) rate...................................7%
Service cost.........................................$120,000
Actual return on plan assets........................295,000
Contributions........................................400,000
Benefits paid........................................300,000
Defined benefit obligation at December 31, 2019, is $6,650,000. There are no accumulated gains or losses at December 31, 2019.
Instructions
a. Prepare a pension worksheet for Kennedy Company for 2019.
b. Prepare the journal entry to record 2019 pension expense.
c. Indicate how pension gains and losses (if any) will be reported by Kennedy in the statement of comprehensive income and the statement of financial position.