Season Tyme Tea Company provided the following information related to its defined-benefit pension plan.
Beginning plan assets at fair value
(equal to the market-related asset value)……………………..$ 954,500
Beginning projected benefit obligation (PBO)……………….1,020,340
Service cost for the year……………………………………… 81,500
Settlement rate……………………………………………….. 10%
Expected return on plan assets……………………………….. 16%
Actual return on plan assets…………………………………... 123,400
Contributions for the year…………………………………….. 67,480
Benefit payments for the year………………………………… 47,440
Beginning Accumulated Other Comprehensive
Income related to prior service costs (debit balance)*………. 65,840
Amortization of prior service costs………………………….. 15,500
Increase in the ending projected benefit obligation
due to changes in actuarial assumptions (i.e., actuarial loss).. 78,625
Average remaining service life of employee base (ARSL)… 10 years
*There is no accumulated OCI related to actuarial gains/ losses as of the beginning of the year.
Required
a. Compute the pension cost for the year.
b. Determine the ending balances of the plan assets and the projected benefit obligation and indicate the funded status of the plan.
c. Determine the ending balance for accumulated other comprehensive income.
d. Prepare the journal entry to record the current year’s pension cost.
e. Reconcile the ending balance in accumulated other comprehensive income.