On January 1, 2015, White Co. had the following balances:
Projected benefit obligation.................................................$7,400,000
Fair value of plan assets.......................................................7,400,000
Other data related to the pension plan for 2015:
Service cost......................................................................315,000
Contributions to the plan.......................................................459,000
Benefits paid.....................................................................450,000
Actual return on plan assets...................................................444,000
Settlement rate........................................................................9%
Expected rate of return..............................................................6%
Instructions
(a) Determine the projected benefit obligation at December 31, 2015. There are no net gains or losses.
(b) Determine the fair value of plan assets at December 31, 2015.
(c) Calculate pension expense for 2015.
(d) Prepare the journal entry to record pension expense and the contributions for 2015.