Ferreri SpA 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, 2022.

The service cost component of pension expense for employee services rendered in the current year amounted to €77,000. The company’s actual funding of the plan (contributions) in 2022 amounted to €250,000. The discount (interest) rate was 10%. Assume no benefits paid in 2022.

Instructions

a. Determine the amounts of the components of pension expense that should be recognized by the company in 2022.

b. Prepare the journal entry to record pension expense and the employer’s contribution to the pension plan in 2022.

c. Indicate the pension-related amounts that would be reported on the income statement and the statement of financial position forFerreri SpA for the year 2022. 

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January 1, December 31, 2022 2022 Defined benefit obligation €1,500,000 €1,527,000 Fair value of plan assets 800,000 1,130,000 Accumulated benefit obligation 1,600,000 1,720,000 Accumulated OCI (G/L)-Net gain -0- 200,000