The Nelson Company has a defined benefit pension plan for its employees. At the end of 2007 and 2008 the following information is available in regard to this pension plan:

There are no other components of Nelson Company's pension expense in either year; ignore any additional pension liability.
Required
1. Compute the amount of Nelson Company's pension expense in 2007 and 2008.
2. Prepare the December 31 journal entry to record the pension expense in 2007 and 2008.
3. What is the total prepaid/accrued pension cost at the end of 2007, assuming no prepaid/accrued pension cost existed prior to 2007? Is it an asset or aliability?

Transcribed Image Text:

2007 2008 28,000 Expected return on plan assets Amortization of unrecognized net gain Amortization of unrecognized net loss Amortization of unrecognized prior service cost Company contribution (funded 12/31) Interest cost on projected benefit obligation Service cost S 27,000 3,000 4,000 6,000 240,000 35,000 217,000 7,000 200,000 32,000 211,000