U.S. Metallurgical Inc. reported the following balances in its financial statements and disclosure notes at December 31,

Question:

U.S. Metallurgical Inc. reported the following balances in its financial statements and disclosure notes at December 31, 2017.

Plan assets.......................................$400,000

Projected benefit obligation....................320,000

U.S.M.'s actuary determined that 2018 service cost is $60,000. Both the expected and actual rate of return on plan assets are 9%. The interest (discount) rate is 5%. U.S.M. contributed $120,000 to the pension fund at the end of 2018, and retirees were paid $44,000 from plan assets.

Required:

1. What is the pension expense at the end of 2018?

2. What is the projected benefit obligation at the end of 2018?

3. What is the plan assets balance at the end of 2018?

4. What is the net pension asset or net pension liability at the end of 2018?

5. Prepare journal entries to record the pension expense, funding of plan assets, and retiree benefit payments.

Financial Statements
Financial statements are the standardized formats to present the financial information related to a business or an organization for its users. Financial statements contain the historical information as well as current period’s financial...
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Intermediate Accounting

ISBN: 9781259722660

9th Edition

Authors: J. David Spiceland, James Sepe, Mark Nelson, Wayne Thomas

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