Turner Inc. provides a defined benefit pension plan to its employees. The company has 150 employees. The remaining amortization period at December 31, 20X0, for prior service cost is 5 years. The average remaining service life of employees is 11 years at January 1, 20X1, and 10 years at December 31, 20X1. The AOCI—net actuarial (gain) loss was zero at December 31, 20X0. Turner smooths recognition of its gains and losses when computing its market-related value to compute expected return.

Additional Information:

Required:

Round all amounts to the nearest dollar:

1. Compute the amount of prior service cost that would be amortized as a component of pension expense for 20X1 and 20X2.

2. Compute the actual return on plan assets for 20X1.

3. Compute the unexpected net gain or loss on plan assets for 20X1.

4. Compute pension expense for 20X1.

5. Prepare the company’s required pension journal entries for 20X1.

6. Compute the 20X1 increase/decrease in AOCI—net actuarial (gain) loss and the amount to be amortized in 20X1 and 20X2.

7. Confirm that the pension asset (liability) on the balance sheet equals the funded status as of December 31, 20X1.

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December 31, Description 20X1 20X0 PBO $1,450,000 1,425,000 1,395,000 1,369,000 $1,377,000 1,350,000 1,085,000 1,085,000 ABO Fair value of plan assets Market-related value of plan assets (smoothed recognition) AOCI-prior service cost Balance sheet pension asset (liability) Service cost 292,000 (292,000) ? 117,400 Contribution 169,000 PBO actuarial gain Benefit payments made 113,250 None None Discount rate 5% 5% Expected rate of return 7% 7%