Pharoah Corp. sponsors a defined-benefit pension plan for its employees. On January 1, 2021, the following balances
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Question:
Pharoah Corp. sponsors a defined-benefit pension plan for its employees. On January 1, 2021, the following balances related to this plan.
| Plan assets (fair value) | $500,000 | ||
| Projected benefit obligation | 550,000 | ||
| Pension asset/liability | 50,000 | Cr. | |
| Prior service cost | 70,000 | ||
| OCI - Loss | 60,000 |
As a result of the operation of the plan during 2021, the actuary provided the following additional data at December 31, 2021.
| Service cost for 2021 | $65,000 | ||
| Actual return on plan assets in 2021 | 45,900 | ||
| Amortization of prior service cost | 11,000 | ||
| Contributions in 2021 | 110,000 | ||
| Benefits paid retirees in 2021 | 75,000 | ||
| Settlement rate | 8 | % | |
| Expected return rate | 9 | % | |
| Average remaining service life of active employees 10 years | |||
(a) Compute pension expense for Pharoah Corp. for the year 2021 by preparing a pension worksheet.
b. Prepare the journal entry for pension expense.
Expert Answer:
Pension worksheet Projected benefit obligation OCIPrior Pension Particulars Annual pension Expense C... View the full answer
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