Information about the defined benefit pension plan of Cold, Inc for 2023 is listed below. 1/1/2023 balance
Question:
Information about the defined benefit pension plan of Cold, Inc for 2023 is listed below.
1/1/2023 balance in Plan Assets $1,400,400 Dr.
1/1/2023 balance in PBO $1,250,000 Cr.
1/1/2023 balance in ABO $1,100,000 Cr.
1/1/2023 balance in OCI-G/L $ 130,000 Cr.
Service Cost for 2023 $ 82,000
Settlement rate 6%
Actual return on plan assets $ 160,000
Expected rate of return on plan assets 9%
Contributions to plan assets $165,000
Benefits paid to retired employees $228,000
• On 1/1/2023, Cold acquired TGS, Inc. and agreed to provide pension benefits to all 125 employees of TGS (now Cold employees), giving them credit for prior years of service at TGS. As a result, the actuaries notified Cold that they had to increase their pension obligation by $535,000. The longest any of these 125 new employees is expected to work is 25 years. Cold will use the years-of-service method to amortize prior service cost.
• Shortly after year-end, Cold actuaries notified them that the pension obligation should have a credit balance of $1,704,500 as of 12/31/2023.
• For purposes of amortizing gains and losses in OCI, the average remaining service life for all Cold employees is 10 years.
How much of the balance in OCI-G/L is subject to amortization in 2024 (assuming no additional credit is granted for prior service in 2024)? Will this amortization result in a debit or credit to OCI-G/L in 2024?
What amount of PSC amortization will Cold Inc recognize in 2023? Will this amortization result in a debit or credit to OCI-PSC?
What is total pension expense for 2023? List each component with relevant amounts with your answer.
Provide the journal entry Cold would prepare to record Pension Expense for 2023.