Question

The following information applies to Riddle Corp.’s defined benefit pension plan for the current year:

Projected benefit obligation January 1 (before amendment)	$600,000
Plan assets January 1	540,000
Pension Asset/Liability, January 1 – credit balance	60,000
Present value of increase in service benefits effective January 1 because of an amendment in the pension plan (not included in the projected benefit obligation above)	150,000
Settlement rate	8%
Contributions to the plan (funding)	50,000
Service Cost	70,000
Actual and expected return on plan assets	55,000
Benefits paid to retirees	30,000
Prior service cost amortization for the current year	15,000

B. Prepare the journal entry to record pension expense at December 31.

           

Answer 1