Larson Corp. sponsors a defined benefit pension plan for its employees. On January 1, 2021, the following

Question:

Larson Corp. sponsors a defined benefit pension plan for its employees. On January 1, 2021, the following balances related to this plan.

Plan assets (market-related value).................................$270,000
Projected benefit obligation..............................................340,000
Pension asset/liability..........................................................70,000 Cr.
Prior service cost..................................................................90,000
OCI—Loss..............................................................................39,000


As a result of the operation of the plan during 2021, the actuary provided the following additional data for 2021.

Service cost..............................................................................$45,000
Actual return on plan assets....................................................27,000
Amortization of prior service cost...........................................12,000
Contributions.............................................................................65,000
Benefits paid retirees................................................................41,000
Settlement rate.................................................................................7%
Expected return on plan assets......................................................8%
Average remaining service life of active employees...........10 years


Instructions

a. Compute pension expense for Larson Corp. for the year 2021 by preparing a pension worksheet that shows the journal entry for pension expense.

b. Indicate the pension amounts reported in the financial statements.

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Related Book For  book-img-for-question

Intermediate Accounting

ISBN: 978-1119503668

17th edition

Authors: Donald E. Kieso, Jerry J. Weygandt, Terry D. Warfiel

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