Ferreri Company received the following selected information from its pension plan trustee concerning the operation of the company’s defined benefit pension plan for the year ended December 31, 2015.

The service cost component of pension expense for employee services rendered in the current year amounted to €77,000. The company’s actual funding (contributions) of the plan in 2015 amounted to €250,000. The discount (interest) rate was 10%. Assume no benefits paid in 2015.
Instructions

(a) Determine the amounts of the components of pension expense that should be recognized by the company in 2015.

(b) Prepare the journal entry to record pension expense and the employer’s contribution to the pension plan in 2015.

(c) Indicate the pension-related amounts that would be reported on the income statement and the statement of financial position for Ferreri Company for the year 2015.

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Defined benefit obligation Fair value of plan assets Accumulated benefit obligation Accumulated OCI (G/L)-Net gain January 1, December 31, 2015 2015 1,500,000 1,527,000 800,000 1,600,000 -0- 1,130,000 1,720,000 200,000