Question

The following information is available for the pension plan of Radcliffe Company for the year 2017....

The following information is available for the pension plan of Radcliffe Company for the year 2017. Actual and expected rate of return on plan assets $ 15,000 Benefits paid to retirees 40,000 Contributions (funding) 90,000 Interest/discount rate 10% Prior service cost amortization $ 8,000 Projected benefit obligation, January 1, 2017 500,000 Service cost 60,000 Instructions: (a) Compute pension expense for the year 2017. Computation of pension expense: (b) Prepare the journal entry to record pension expense and the employer's contribution to the pension plan in 2017. Debit Credit

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Answer #1
a
Service cost 60000
Interest cost 50000 =500000*10%
Expected return on plan assets -15000
Prior service cost amortization 8000
Pension expense for the year 2017. 103000
b
Debit Credit
Pension Expense 103000
        Cash 90000
        Pension Asset/Liability 5000
        Other Comprehensive Income (PSC) 8000
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